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L    H'5  BOOKKEKPING.  Sheet    1 

INTRODUCTORY  TO  IJUSI  :riCE.(?accb 

Started  upiTipi©t?d  Tim^ 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

Microsoft  Corporation 


http://www.archive.orgMetails/bookkeepingconiplOOniinerich 


MOORE  AND  MINER  SERIES 


BOOKKEEPING 


COMPLETE  COURSE 


BY 

GEORGE  W.  MINER 


GINN  AND  COMPANY 

BOSTON  •  NEW  YORK  •  CHICAGO  •  LONDON 


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fVti.-i 


COPYRIGHT,  1902,  BY 
JOHN  H.  MOORE  and  GEORGE  W.  MINER 


COPYRIGHT,  1912,  BY 
GEORGE  W.  MINER 


ALL  RIGHTS   RESERVED 
913.10 

EDUCATION  DEWc 


<C6e  fltftcngnm  greg< 

GINN  AND  COMPANY  •  PRO- 
PRIETORS •  BOSTON  •  U.S.A. 


PEE FACE 


The  plan  of  this  work  on  Bookkeeping  is  simple  yet  comprehensive, 
and  the  work  is  graded  and  developed  with  a  view  to  interesting  the 
student  and  imparting  to  him  a  knowledge  of  the  subject  that  will  have 
both  an  educational  and  a  practical  value. 

Nearly  all  entries  in  bookkeeping  are  simple  in  character,  and  this 
fact  is  emphasized  in  the  exercises  and  sets  herein  given.  To  cultivate 
self-reliance  many  reviews  are  included.  These  reviews  are  so  arranged 
that  the  student  does  the  work  without  assistance.  The  chief  object  is 
to  enable  him  to  master  the  principles  of  bookkeeping,  and  then  the 
application  of  these  principles  to  the  various  problems  that  may  arise  in 
business  is  not  difficult. 

Business  forms  are  provided  for  a  number  of  practice  sets.  This  por- 
tion of  the  work  is  of  an  elastic  character  and  may  be  used  according  to 
the  time  allotted  to  the  study  of  bookkeeping,  the  requirements  of  the 
course  of  study,  or  the  inclination  of  the  instructor. 

The  author  acknowledges  his  profound  obligations  to  his  friend,  part- 
ner, and  coworker,  the  late  John  H.  Moore. 

The  following  persons  read  either  the  manuscript  or  the  proof  sheets, 
and  the  helpful  criticisms  and  suggestions  they  made  have  contributed 
greatly  to  the  value  of  the  work :  Henry  R.  Hatfield,  Professor  of  Ac- 
counting, University  of  California;  Stephen  W.  Oilman,  Professor  of 
Business  Administration,  University  of  Wisconsin ;  William  M.  Cole, 
Assistant  Professor  of  Accounting,  Harvard  University ;  Joseph  F.  John- 
son, Dean  of  the  School  of  Commerce,  Accounts,  and  Finance,  New  York 
University ;  Charles  C.  Jones,  Principal  of  the  Commercial  Department, 
High  School,  Dunkirk,  New  York ;  Albert  G.  Belding,  First  Assistant, 
Far  Rockaway  High  School,  New  York  City ;  Myron  F.  Palmer,  Prin- 
cipal Bay  Path  Institute,  Springfield,  Massachusetts ;  Elizabeth  F. 
Atwood,  Commercial  Department,  High  School,  Westfield,  Massa- 
chusetts; Elizabeth  Campbell,  Commercial  Department,  High  School, 
Somerville,  Massachusetts., 

Business  men,  bookkeepers,  and  accountants  have  also  been  consulted 
freely  regarding  many  features  of  this  text,  and  their  practical  sugges- 
tions have,  added  to  the  working  value  of  the  book.  A  part  of  this  text 
is  developed  from  "Accounting  and  Business  Practice." 

541972 


CONTENTS 

PART  I.   INTRODUCTORY  COURSE 

PAGE 

INTRODUCTION 1 

.SCRIPT  FORMS  AND  MODELS 6 

,^  FUNDAMENTAL  PRINCIPLES 7 

%  FORMS  OF  STATEMENTS 39 

SET  I.   RETAIL  FUEL  AND  FEED  BUSINESS       41 

SET  11.  WHOLESALE  CARPET  BUSINESS 61 

LABOR-SAVING  DEVICES 58 

INTRODUCTION  TO  BUSINESS  PRACTICE 67 

SET  III.   GRAIN  AND  SEED  BUSINESS.   MARCH 80 

INDORSEMENTS 89 

SET  III.   GRAIN  AND  SEED  BUSINESS.   APRIL 91 

SET  IV.   GENERAL  HARDWARE  BUSINESS.   MAY       99 

SET  IV.   GENERAL  HARDWARE  BUSINESS.   JUNE 107 

/commercial  drafts 116 

^  SUGGESTIONS  FOR  BUSINESS  CORRESPONDENCE 125 

PART  II.    INTERMEDIATE  COURSE 

COMMERCIAL  DRAFTS 127 

SET  V.  JOBBING  FURNITURE  BUSINESS 140 

BILLS  OF  LADING 159 

PARTNERSHIP 181 

SET  VI.   WHOLESALE  GROCERY  BUSINESS 201 

PART  III.    ADVANCED  COURSE 

SET  VII.   DRY-GOODS  BUSINESS  .^T^TT" " 249 

DEPRECIATION 293 

CORPORATIONS  AND  KINDRED  ORGANIZATIONS 297 

SET  VIII.  MANUFACTURING  BUSINESS • 313 

APPENDIX  A.   SINGLE  ENTRY i 

APPENDIX  B.  DEFINITIONS  AND  EXPLANATIONS xi 

APPENDIX  C.  LOOSE-LEAF  METHODS  AND  FILING  DEVICES    . xiv 

APPENDIX  D.   COMMERCIAL  TERMS  DEFINED xvi 

APPENDIX  E.   ABBREVIATIONS  AND  GENERAL  TERMS  , xix 

APPENDIX  F.   FORMS  AND  LEGAL  DOCUMENTS xxi 

INDEX  ,    .    .    , ,    .    .    t  X3:ix 


LIST  OF  EXERCISES 


PAGES 

Model  Script  Set 2-5 

Exercise  1.   Business  Transactions  Explained 7 

Exercises  2-5.    Elementary  Journalizing 8-10 

Exercise  6.    Terms  Explained 11 

Exercise  7.    Classifying  Debits  and  Credits  .    , 11-12 

Exercise  8.    Suggestions  for  Ruling 13 

Exercise  9.    Set  A  (Model  Set).    General  Merchandise 13-14 

Exercise  10.   Analysis  of  the  Model  Journal 15 

Exercise  11.    Summary  of  Principles 15-16 

Exercise  12.    Copying  the  Model  Journal 16 

Exercise  13.   Directions  for  Posting 16-17 

Exercise  14.    Analysis  of  the  Model  Ledger      18 

Exercise  15.   Trial  Balance  of  the  Model  Ledger 18 

Exercise  16.    Posting  the  Model  Journal;  Rechecking ."    .  19 

Exercises  17-20.   Journalizing 20-21 

Exercise  21.    Set  B.   Furniture 21-22 

Exercise  22.   Set  C.    Grain  and  Seed 22-24 

Exercises  23-24.    Classification  of  Accounts 24-26 

Exercise  25.   Terms  Defined  and  Explained 27 

Exercise  26.   Trial  Balances  for  Statements 28 

Exercise  27.    Making  Statements 29 

Exercise  28.   Rulings  for  closing  the  Ledger 30 

Exercises  29-32.    Closing  the  Ledger 30-36 

Exercise  33.    Set  D.    Hardware 37-38 

Exercise  34.    Correction  of  Errors 38-39 

Exercise  35.    A  Written  Review 45-49 

Exercise  36.    A  Written  Revieav 54-58 

Exercise  37.    Set  E  (Model  Set).    Flour  and  Grain 58-61 

Exercise  38.    Set  F.    Coal  and  Wood 61-62 

Model  Script  Set      63-67 

Exercise  39.   Transactions  with  a  Bank 74 

Exercise  40.   Business  Forms 74-78 

Exercise  41.   The  Trial  Balance 79 

Exercise  42.   A  Written  Review 89 

Exercise  43.   A  Written  Review 95-96 

Exercise  44.   Interest  and  Discount 96-97 

Exercise  45.   Interest  and  Discount  Entries 97 


LIST  OF  EXERCISES 

PAGES 

Exercise  46.    Compound  Entries 98 

Exercise  47.   A  Written  Review 106 

Exercise  48.   A  Written  Review 112 

Exercise  49.    Set  G.    Grain 112-114 

Exercise  50.    Consignments 114-116 

Exercise  51.    Writing  Drafts 120-122 

Exercise  52.   Bank  Drafts,  Oral  Work 125 

Exercise  53.    A  Written  Review  of  Sight  Drafts 127 

Exercise  54.    For  Written  Work,  Drafts 133 

Exercise  55.    For  Oral  Work,  Drafts 134 

Exercise  56.    A  Written  Review,  Drafts 135 

Exercise  57.    Opening  Double-Entry  Books 136 

Exercise  58.   A  Written  Review 179 

Exercise  59.    A  Written  Review 197 

Exercise  60.    A  Written  Review 230 

Exercise  61.   A  Written  Review 246 

Exercise  62.    Set  H.    Carpets 246 

Exercise  63.   A  Written  Review   . 276 

Exercise  64.    A  Written  Review 295 

Exercises  65-66.    Opening  Entries  in  Cokpouation  Bookkeeping     ....  301,  307 


BOOKKEEPII^G 

PART  I.    INTRODUCTOKY  WORK 

INTRODUCTION 

1.  It  is  of  first  importance  that  the  student  should  begin  his  work  in 
accounts  at  some  point  where  knowledge  of  his  own  is  readily  associated 
with  that  systematic  arrangement  of  the  record  of  business  transactions 
termed  Bookkeeping.  The  unknown  must  come  into  definite  contact  with 
the  known  if  the  mmd  of  the  learner  is  to  be  led  step  by  step  to  larger 
understanding.  Students  who  know  nothing  of  accounts  are  often  very 
familiar  with  the  buying  of  household  articles,  and  understand  that  they 
get  one  value  by  giving  some  other  value  in  return.  The  starting  point 
in  this  text  treats  of  the  giving  and  the  receiving  of  values,  and  this 
feature  is  developed  by  a  series  of  graded  exercises. 

2.  The  ability  to  apply  a  principle  is  always  of  positive  value ;  for 
this  reason,  in  the  body  of  the  text,  terms  are  described  and  applied 
rather  than  defined.  However,  for  the  accommodation  of  those  instruc- 
tors who  wish  formal  definitions,  an  appendix  is  given  in  which  terms 
are  defined. 

3.  A  script  model  set  is  given,  worked  out  in  all  details,  using  the 
journal  and  the  ledger,  and  the  results  and  the  condition  of  the  business 
are  fully  shown.  Later,  when  the  cashbook,  the  purchase  book,  and  the 
sales  book  are  introduced,  another  script  set  is  given  for  the  student's 
direction. 

4.  The  oral  exercises  include  a  large  number  of  entries  which  cover  an 
extensive  variety  of  transactions.  They  afford  material  for  study,  for 
class  discussion,  and  for  instruction  in  the  principles  of  bookkeeping. 

5.  At  the  close  of  each  set,  reviews  are  given  which  provide  differ- 
ent kinds  of  work.  In  these  reviews,  the  text  gives  the  student  no  aid, 
but  he  has  an  opportunity  to  test  independently  the  knowledge  he  has 
gained.  Some  of  these  review  exercises  have  sufficient  data  for  a  com- 
plete set. 

6.  The  first  exercise  in  the  student's  work  is  found  on  page  7. 

1 


BOOKKEEPING 

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THE  SCRIPT  FORMS  AND  MODELS 

In  connection  with  the  student's  prehminary  work  he  is  directed  to 
write  some  of  the  script  forms  given  on  preceding  pages.  These  forms 
represent  the  highest  excellence  in  penmanship  and  may  serve  as  models 
in  writing  for  the  student.  The  plan,  statement,  and  arrangement  of 
these  models  may  be  a  guide  to  the  student  in  all  his  work  throughout 
the  book.  The  method  of  placing  matter  on  the  page  and  the  complete- 
ness of  explanations  are  parts  of  high-grade  bookkeeping. 

While  writing  these  models  the  student  is  learning  how  to  place  busi- 
ness transactions  on  the  written  page  in  the  most  approved  manner.  Busi- 
ness records  are  not  only  valuable  when  made,  but  may  be  of  especial 
importance  years  hence ;  therefore  it  is  necessary  that  the  statements  be 
clear  not  only  to  the  writer  but  to  any  person  who  may  have  occasion 
to  examine  them  at  any  future  time.  If  books  are  introduced  into  court 
as  evidence,  the  explanatory  part  of  the  records  is  often  the  most  impor- 
tant. It  is  the  experience  of  attorneys  that  very  few  books  of  record 
that  are  brought  into  court  have  any  value  as  evidence,  because  of  the 
incompleteness  of  the  explanatory  matter.  If  explanations  are  not  made 
clearly,  a  cbrrect  entry  is  of  little  value  as  conclusive  evidence. 

Erasures  are  not  to  be  tolerated,  as  they  not  only  spoil  the  neatness  of 
the  page,  but  often  make  entries  look  suspicious. 


FUNDAMENTAL   PRINCIPLES 

EXERCISE  1 

For  Oral  Work 

*^ 

A  Business  Transaction  is  an  exchange  of  values ;  that  is,  the  giving  of 
one  value  in  return  for  another. 

A  bought  of  B  20  T.  coal  at  |5  per  ton,  and  paid  the  money  for  it. 
Name  the  two  values  in  this  transaction.  Which  value  did  A  receive  ? 
Which  value  did  he  give  ? 

A  sold  to  C  2  T.  coal  at  |6  per  ton,  and  received  the  money  for  it. 
Name  the  two  values  in  this  transaction.  Which  value  did  A  receive  ? 
Which  value  did  he  give  ? 

Each  of  the  above  transactions  is  an  exchange  of  values.  In  the  first,  A  receives 
value,  20  T.  coal,  and  gives  value,  $100  in  money.  In  the  second,  A  receives  value,  $12 
in  money,  and  gives  value,  2  T.  coal. 

A  merchant  sold  a  pair  of  shoes  for  $4 ;  the  value  received  by  him 
was  $4^  and  the  value  given  was  a  pair  of  shoes. 

A  man  sold  a  horse  for  $100 ;  the  value  received  by  him  was  $100^ 
and  the  value  given  was  the  horse. 

A  doctor  occupied  a  suite  of  rooms  which  belonged  to  another  man, 
for  the  use  of  which  he  paid  the  owner  at  the  end  of  one  month  $50 ; 
the  value  received  by  the  doctor  was  the  use  of  the  rooms,  and  the  value 
given  was  ^dO. 

A  grocer  sold  John  Bell  a  barrel  of  flour  for  |6,  which  was  to  be  paid 
for  in  10  da.,  a  sale  on  credit  or  on  account;  the  value  received  by  the 
grocer  was  the  expressed  or  implied  promise  of  the  customer  to  pay  the 
bill  in  10  da.,  and  the  value  given  was  the  barrel  of  flour. 

A  manufacturer  paid  B  $2  for  shoveling  snow  off  his  sidewalks ;  the 
value  received  by  the  manufacturer  was  the  services  of  B,  and  the  value 
given  was  #^. 

C  borrowed  $100  of  D,  and  at  the  end  of  6  mo.  paid  $3  for  the  use 
of  the  money  to  date ;  the  value  received  by  C  was  the  use  of  $100  for 
6  mo.,  and  the  value  given  was  $3. 

Henry  Brown  bought  a  suit  of  clothes  of  his  tailor  for  which  he  paid 
$40  ;  the  value  received  by  Brown  was  the  suit  of  clothes,  and  the  value 
given  was  $40. 

These  represent  business  transactions,  for  they  show  that  for  every  value  received 
a  value  was  given. 

7 


8  BOOKKEEPING 

EXERCISE  2 

EoR  Oral  Work 

These  items  represent  the  transactions  of  a  merchant,  Edward  M. 
Brown,  for  several  days.  Name  the  value  received  and  the  value  parted 
with  in  each  transaction. 

Feh  1,  Bought  of  A.  R.  Dean  for  cash,  500  bu.  wheat  at  |1. 
2,  Sold  Fred  S.  Lay  for  cash,  100  bu.  wheat  at  ^1.15. 

5.  Bought  of  John  Barr  for  cash,  50  bu.  beans  at  $3. 
4.  Sold  Bell  Bros,  for  cash,  30  bu.  beans  at  |3.50. 

6.  Bought  of  H.  A.  Leary  for  cash,  a  set  of  ofi&ce  books  for  |15. 

This  item  is  called  Expense  because  the  supplies  were  bought  to  be  consumed, 
not  to  be  sold,  —  an  expenditure  to  carry  on  the  business. 

6.  Bought  of  Thos.  M.  Day  for  cash,  200  bu.  millet  at  |1. 
6.  Sold  S.  A.  Allen  for  cash,  100  bu.  millet  at  |1.30. 

8.  Paid  John  Race,  a  carpenter,  cash  for  repair  work,  $6. 

9.  Bought  a  delivery  wagon  of  A.  R.  Meek  for  cash,  |55. 

10.  Bought  a  horse  of  James  Crow  for  cash,  |75. 

11.  Sold  J.  H.  Morse  for  cash,  200  bu.  wheat  at  |1.15. 

12.  Bought  of  Arthur  Way  60  bu.  beans  at  |3,  and  agreed  to  pay 
for  them  in  10  da. 

In  this  transaction  the  value  received  is  the  60  bu.  beans,  and  the  value  parted 
with  is  the  stated  or  implied  promise  to  pay  for  them  in  10  da. 

13.  Sold  Isaac  Mason  40  bu.  beans  at  $3.50,  and  he  agreed  to  pay  for 
them  in  15  da. 

15.  Gave  John  Weeks,  a  clerk,  cash,  $10, 

EXERCISE  3 

PoR  Written  Work 

Take  a  sheet  of  paper  and  draw  a  line  through  the  middle  of  the 
page  from  the  top  to  the  bottom.  On  the  left  side  of  this  line  write  the 
technical  name  of  the  value  received,  and  on  the  right  side  of  the  line 
write  the  teclmical  name  of  the  value  parted  with,  for  each  transaction 
in  Exercise  2. 

The  technical  term  applied  to  goods  bought  to  be  sold  is  Merchandise  ; 
to  any  expenditure  to  carry  on  the  business.  Expense;  to  all  forms  of 
money,  and  business  papers  which  pass  as  money,  Cash. 

Cash  includes  gold,  silver,  paper  money,  checks,  bank  drafts,  money  ordeis,  etc. 


FUNDAMENTAL  PRINCIPLES  9 

Expense  may  include  rent,  fuel,  lighting,  clerk  hire,  postage,  stationery,  adver- 
tising, and  the  like. 

AVhen  there  is  an  expenditure  to  carry  on  the  business,  such  as  the  payment  of 
money  for  rent,  the  value  received  is  entered  under  the  name  Expense. 

Items  of  Feb.  1,  2,  8,  and  12  will  appear  as  follows,  in  the  order  named: 


Mdse. 
Cash 
Expense 
Mdse. 


$500 

Cash 

115 

Mdse. 

6 

Cash 

180 

Arthur  Way 

EXERCISE  4 

Written  Work 

1500 

115 

6 

180 


This  exercise  is  to  be  worked  out  in  the  same  form  as  the  preceding 
one;  that  is,  the  names  and  the  amounts  of  the  values  received  and 
parted  with  are  to  be  placed  respectively  on  the  left  and  right  sides  of 
a  perpendicular  line.    As  a  review,  the  exercise  may  be  used  first  orally. 

These  items  represent  the  transactions  of  a  merchant,  Richard  S.  Rowe, 
for  several  days. 

March  1.  Bought  of  J.  N.  Osborn  for  cash,  60  yd.  velvet  carpet  at  |1. 

2,  Sold  Allan  Dale  for  cash,  25  yd.  velvet  carpet  at  |1.20. 

3.  Paid  Henry  A.  Milton  cash,  for  rent  of  the  store  for  1  mo.,  |28. 

A  receipt  similar  to  the  one  illustrated  herewith  would  be  received  by  Rowe  from 
Milton. 


T^eceived  of     /\^^r^.^^^-^^./{^ 


i^^^y^v^  yf.   /^  yv^^^^.:?,/9 


$  Zr^^    .  ^^^^^.  f^9^^Jt^y 


4.  Bought  of  Wm.  Jackson  for  cash,  100  yd.  Brussels  carpet  at  f  1.25. 
d.  Sold  John  Welton  for  cash,  40  yd.  Brussels  carpet  at  $1.50. 
6.  Bought  of  John  Lane,  on  account,  20  Smyrna  rugs  at  |3.75. 

On  the  right  side  of  the  line  write  John  Lane,  because  the  promise  was  given  to  him. 
In  this  transaction,  on  account  means  that  the  goods  bought  are  to  be  paid  for  at 
some  future  time. 


10  BOOKKEEPING 

March  6,  Sold  John  Drew,  on  account,  10  Smyrna  rugs  at  $4.75. 

On  the  left  side  of  the  line  write  John  Drew,  because  the  promise  was  received 
from  him. 

8.  Sold  Ira  Hicks  for  cash,  5  Smyrna  rugs  at  $5. 

9.  Bought  of  D.  K.  Pearson  for  cash,  100  yd.  ingrain  carpet  at  70^. 

10.  Paid  John  Lane  cash,  to  apply  on  account,  |50. 

On  the  left  side  of  the  line  write  John  Lane,  because  the  promise  given  was  redeemed. 
In  this  transaction,  to  apply  on  account  means  that  only  a  part  of  what  was  owed 
was  paid. 

11.  Sold  A.  L.  Derby  for  cash,  50  yd.  ingrain  carpet  at  85^. 

12.  Received  of  John  Drew  cash,  to  apply  on  account,  $25. 

On  the  right  side  of  the  line  write  John  Drew,  because  he  redeemed  his  promise. 

13.  Bought  of  Harry  Lucas  for  cash,  office  books  and  stationery,  $12. 
13.  Bought  of  A.  F.  Service  for  cash,  200  yd.  matting  at  45^. 

15.  Sold  Harvey  Oilman  for  cash,  100  yd.  matting  at  60^. 

16.  Bought  of  Harvey  Pease  for  cash,  3  T.  coal  for  office  use  at  $6. 

17.  Sold  John  L.  Smith  for  cash,  50  yd.  matting  at  58(^. 

18.  Sold  Albert  Owen,  on  account,  40  yd.  matting  at  63^. 

19.  Bought  of  Amos  Oibson,  on  account,  100  yd.  velvet  carpet  at  $1. 

20.  Sold  Lester  Ford  for  cash,  25  yd.  velvet  carpet  at  $1.40. 

22.  Paid  Amos  Oibson  cash,  to  apply  on  account,  $75. 

23.  Received  of  Albert  Owen  cash,  in  full  of  account,  $25.20. 

In  full  of  account  means  that  all  that  was  owed  on  a  given  account  was  paid. 


EXERCISE  5 

For  Written  Work 

In  this  exercise  use  the  same  form  as  in  Exercises  2  and  4.  As  a 
review,  the  exercise  may  be  used  first  orally. 

These  items  represent  the  transactions  of  a  merchant,  James  A. 
Murphy,  for  several  days. 

April  1.  Bought  of  Ball  &  Son  for  cash,  200  bbl.  flour  at  $5. 

2.  Sold  Henry  Allen  for  cash,  100  bbl.  flour  at  $6.50. 

3.  Paid  John  Weeks  cash,  for  rent  of  the  store  for  1  mo.,  $50. 

4.  Bought  of  Hunt  &  Co.,  at  10  da.,  500  bu.  wheat  at  95^. 
At  10  da.  means  on  account,  to  be  paid  in  10  da. 

6.  Sold  Powell  &  Co.,  at  10  da.,  300  bu.  wheat  at  $1.10. 
6.  Sold  Lane  &  Son  for  cash,  50  bbl.  flour  at  $6.50. 


FUNDAMENTAL  PRINCIPLES  11 

April  6.  Bought  of  Harper  &  Co.  for  cash,   5  T.  coal  for  office  use 
at  *6. 

8.  Sold  Lee  &  Sampson  for  cash,  100  bu.  wheat  at  |1.08. 

9,  Bought  of  Field  &  Co.  for  cash,  1  office  safe  for  |65. 

Transactions  for  April  9  and  10  may  be  treated  as  Expense  items. 

10.  Bought  of  Derby  Desk  Co.  for  cash,  1  office  desk  for  |35. 

11,  Bought  of  Wright  Bros,  for  cash,  600  bu.  corn  at  50<f. 
m  Sold  Elder  &  Co.  for  cash,  50  bu.  wheat  at  $1.05. 

15.  Paid  Hunt  &  Co.  cash,  for  the  amount  of  the  bill  of  April  4. 

Id.  Received  of  Powell  &  Co.  cash,  for  the  amount  of  the  bill  of 
April  5. 

16,  Paid  John  Atlin,  a  clerk,  cash,  |10. 


EXERCISE  6 

TERMS  EXPLAINED 

All  items  at  the  left  of  the  perpendicular  line,  in  the  preceding  exer- 
cises, are  debits,  and  all  items  at  the  right  are  credits  ;  hence 

Debits  represent  values  received,  and  Credits  values  parted  with. 

A  systematic  classification  of  debits  and  credits  in  business  trans- 
actions is  called  Journalizing. 

A  person  who  owes  a  debt  is  called  a  Debtor;  a  person  to  whom  a 
debt  is  owed,  a  Creditor. 

A  Debit  is  an  amount  due  the  business,  or  the  amount  of  a  thing  or 
a  service  received ;  a  Credit  is  an  amount  owed  by  the  business,  or  the 
amount  of  a  thing  or  a  service  given. 

By  universal  custom,  the  left-hand  side  of  an  account  is  the  Debit  side, 
and  the  right-hand  side  the  Credit  side. 

As  an  oral  exercise,  go  over  all  the  transactions  in  Exercises  2,  4, 
and  5,  and  classify  the  values  received  and  parted  with  as  debits  and 
credits. 

EXERCISE  7 

For  Written  Work 

These  items  represent  the  transactions  of  a  merchant,  Wm.  L.  Martin, 
for  several  days.    Classify  the  values  as  debits  and  credits. 

May  1.  Bought  of  Brown  Bros.,  on  account,  1000  bu.  wheat  at  Jl. 

2.  Bought  of  Taylor  &  Co.,  at  10  da.,  1000  bu.  com  at  45^. 

3.  Sold  Henry  Smith,  at  15  da.,  200  bu.  wheat  at  $1.20. 


12  BOOKKEEPING 

The  technical  term  for  my  written  promise  to  pay  money  to  another 
is,  on  my  books,  Bills  Payable  ;  for  his  written  promise  to  pay  me.  Bills 
Receivable. 

Some  instructors  prefer  to  use  the  terms  Notes  Payable  and  Notes  Receivable. 
There  is  no  objection  to  the  use  of  these  terms. 

The  following  Promissory  Note  would  be  classified  as  Bills  Payable  by  Henry  W. 
Sherman,  and  as  Bills  Receivable  by  Morgan,  Taylor  &  Co. 


" — ^'^^^y^^^r'^-y:  f:^^^.-^^  — -  after  daU'^ promise  to  pay  to 

the  order  of  ^v^p^-^^^-^^^^^^  lV^^.^^^^^-  >^-\2^7r^- 


^^-^^A^^j^^r-:^^^..'^^^^^,^^         ~ ■ T>oUars 

nf   >^^^:^^..^^^4^^^^^^^^y^^  - 

Value  received 


May  4.  Gave  Brown  Bros,  a  note  at  5  da.,  for  $500. 

Who  received  value  in  this  transaction  ?   What  is  the  name  of  the  value  parted 
with? 

5.  Received  of  Henry  Smith  his  note  at  5  da.,  for  |240. 
What  value  was  received  in  this  transaction  ?   To  whom  was  value  given  ? 

6.  Sold  James  W.  Hills  for  cash,  400  bu.  corn  at  55(^. 

6.  Paid  H.  S.  Crane  cash,  for  rent  of  the  store  for  1  mo.,  |50. 

8.  Bought  of  James  B.  Williams,  on  account,  1000  bu.  oats  at  40(^. 

9.  Paid  Brown  Bros,  cash,  for  a  note  due  to-day,  $500. 

The  name  of  the  value  given  in  the  transaction  of  May  4  is  here  the  name 
of  the  value  redeemed. 

10.  Received  of  Henry  Smith  cash,  for  his  note  due  to-day,  $240. 

The  name  of  the  value  received  in  the  transaction  of  May  5  is  here  the  namB 
of  the  value  parted  with. 

11.  Sold  Wm.  Jones,  on  account,  500  bu.  oats  at  50(^. 

12.  Bought  of  Lacey  &  Son  for  cash,  2  T.  coal,  to  be  used  for  heating 
the  store,  at  $5. 

IS.  Received  of  Wm.  Jones  cash,  to  apply  on  account,  $100. 

13.  Paid  James  B.  Williams  cash,  to  apply  on  account,  $250. 
15.  Paid  Mary  A.  Brown,  a  clerk,  cash,  $20. 


FUNDAMENTAL  PRINCIPLES  13 

EXERCISE  8 

SUGGESTIONS  FOR  RULING 

Good  mechanical  work  is  essential  in  bookkeeping.  If  good  results 
are  to  be  secured,  the  pen,  the  ruler,  and  the  blotter  must  be  used  in 
the  right  way. 

Use  red  ink  for  all  ruling ;  always  have  a  blotter  at  hand ;  use  a 
medium  pen,  not  too  fine;  dip  the  pen  in  the  ink  lightly;  avoid  getting 
ink  on  the  ruler. 

Use  ordinary  writing  paper,  ruled;  sit  facing  the  desk  squarely;  place 
the  paper  directly  in  front  of  you. 

Place  the  beveled  edge  of  the  ruler  just  below  the  first  ruled  line  on 
the  page ;  keep  the  point  of  the  pen  away  from  the  ruler.  Draw  a  line 
across  the  page,  keeping  the  pen  on  the  ruled  line,  as  follows : 

Do  not  lift  the  pen  until  the  line  is  finished.  Continue  this  ruling 
until  you  have  ruled  a  red  line  on  every  blue  line  of  the  page. 

Now  rule  lines  between  the  ruled  lines  of  the  page  just  finished. 

Use  a  second  sheet  of  paper  for  ruling  double  lines.  Draw  a  single  red 
line  on  the  blue  line ;  without  moving  the  ruler  draw  a  second  red  line 
just  underneath  the  first.    You  now  have  parallel  lines  across  the  page. 

Parallel  lines :  ' 

In  ruling  parallel  lines  the  position  of  the  ruler  is  not  changed,  but 
the  hand  is  pressed  slightly  forward. 

Repeat  the  parallel  ruling  until  both  sides  of  the  sheet  have  been 
ruled,  then  rule  parallel  lines  between  the  lines  already  ruled. 

This  exercise  in  ruling  should  be  repeated  from  day  to  day  until  good 
results  are  secured. 


EXERCISE  9 

SET  A  (MODEL  SET).   GENERAL  MERCHANDISE 

On  pages  2  to  5  is  a  model  set,  in  script,  complete  in  every  detail. 
This  set  was  written  from  the  following  memoranda  of  transactions. 
Study  each  transaction  in  connection  with  the  entry  for  it  in  the  model 
journal,  both  the  debit  and  the  credit,  also  the  explanatory  portion.  Note 
the  name  given  to  each  column  in  the  journal.  The  paragraph  in  script 
at  the  beginning  of  the  journal  is  the  memorandum,  setting  forth  the 
conditions  under  which  business  was  begun.  The  figures  in  the  middle 
of  the  script  journal  page  are  the  dates. 


14  BOOKKEEPING 

When  a  man  begins  business  he  usually  makes  an  investment,  so  that 
he  may  be  able  to  carry  on  his  business.  In  these  practice  sets  cash 
investments  will  be  used. 

In  this  set  the  proprietor,  James  Wilson,  makes  a  cash  investment  of 
12000. 

Memoranda  of  Transactions 

Jan.  1.  James  Wilson  began  business,  investing  cash,  |2000. 
2.  Paid  James  A.  Bird  cash,  for  rent  of  the  store  for  1  mo.,  $50. 
S.  Bought  of  M.  C.  Brown  for  cash : 

190  bbl.  Flour  at  #5 

4.  Sold  H.  King  for  cash : 

45  bbl.  Flour  at  $6 

5.  Bought  of  L.  C.  Horton  for  cash : 

24  bbl.  Flour  at  |5  120  bbl.  Salt  at  |1 

6.  Sold  D.  Simons  on  account: 

30  bbl.  Flour  at  $6  40  bbl.  Salt  at  |1.60 

8.  Sold  A.  Mead  for  cash : 

20  bbl.  Flour  at  |5.50  10  bbl.  Salt  at  |1.50 

9,  Bought  of  O.  Lane  on  account : 

60  bbl.  Flour  at  $5.24  61  bbl.  Salt  at  $1 

10,  Received  of  D.  Simons  cash,  to  apply  on  account,  |144. 

11.  Paid  O.  Lane  cash,  to  apply  on  account,  1175.40. 

Inventory,  January  31,  19 — 
Merchandise : 

179  bbl.  Flour  at  |5  $895 

131  bbl.  Salt  at  $1  131     $1026 


just  for  convenience.   The  use  of  the  inventory  will  be  djl^ssed  in  Exercise  23. 

The  fundamentals  of  bookkeeping  are  recognized  by  all  bookkeepers,  but  the  forms  of 
record  vary.  One  of  the  simplest  forms  of  recording  business  transactions  is  to  write  the 
dates,  the  debit  and  the  credit  titles,  a  complete  history  of  the  transactions,  and  the  money 
values  of  the  same  in  a  book  called  the  Journal,  including  the  daybook  record  or  explana- 
tions, and  to  collect  and  classify  these  entries  in  a  book  of  accounts  called  the  Ledger. 

This  method  is  set  forth  in  the  introductory  work. 


[ 


k 


FUNDAMENTAL  PRINCIPLES  15 

EXERCISE  10 
ANALYSIS  OF  THE  MODEL  JOURNAL 

The  following  is  an  analysis  of  each  entry  in  the  model  journal.   Similar 
analyses  should  be  used  in  connection  with  all  journalizing. 

Entry    1.  Cash  is  debited  because  value  was  received  by  the  business  under  the  title 
Cash. 
James  Wilson  is  credited  for  the  amount  he  invested  in  the  business. 
Entry    2.  Expense  is  debited  because  value  was  received  by  the  business  under  the 
title  Expense. 
Cash  is  credited  because  value  was  parted  with  by  the  business  under  the 
title  Cash. 
Entry    3.  Merchandise  is  debited  because  value  was  received  by  the  business  under 
the  title  Merchandise. 
For  the  credit,  refer  to  the  second  part  of  Entry  2. 
Entry    4.  For  the  debit,  refer  to  the  first  part  of  Entry  1. 

Merchandise  is  credited  because  value  was  parted  with  by  the  business 
under  the  title  Merchandise. 
Entry    5.  For  the  debit,  refer  to  the  first  part  of  Entry  3. 

For  the  credit,  refer  to  the  second  part  of  Entry  2. 
Entry    6.  D.  Simons  is  debited  because  he  became  indebted  to  the  business. 

For  the  credit,  refer  to  the  second  part  of  Entry  4. 
Entry    7.  Refer  to  Entry  4. 
Entry    8.  For  the  debit,  refer  to  the  first  part  of  Entry  3. 

O.  Lane  is  credited  because  the  business  became  indebted  to  him. 
Entry    9.  For  the  debit,  refer  to  the  first  part  of  Entry  1. 

D.  Simons  is  credited  because  he  got  out  of  debt  to  the  business. 
Entry  10.  O.  Lane  is  debited  because  the  business  got  out  of  his  debt. 
For  the  credit,  refer  to  the  second  part  of  Entry  2. 


EXERCISE  11 

SUMMARY  OF  PRINCIPLES 

In  the  study  of  the  preceding  exercises  it  has  been  seen  that  we 

DEBIT  AND  CREDIT 

1.  That  which  is  bought  2.  That  which  is  sold 

3.  That  which  costs  value  4.  That  which  produces  value 

5.  All  moneys  received  6.  All  moneys  paid  out 

7.  Persons  who  owe  the  busi-  8.  Persons    whom    the    busi- 
ness                                                      ness  owes 

9.  Other    persons'    notes    re-  10.  Other  persons'  notes  when 
ceived                                                   paid  by  them 

11.  Our  notes  received  (paid)  12,  Our  notes  given  (issued) 


16  BOOKKEEPING 

The  foregoing  principles  may  be  summarized  as  One  General  Principle 
for  Journalizing,  as  follows : 

Debit,  under  their  appropriate  names,  all  values  that  are  received  by  the 
business.    (See  Debit,  Appendix  B.) 

Credit,  under  their  appropriate  names,  all  values  that  are  given  by  the 
business.    (See  Credit,  Appendix  B.) 

These  principles  are  not  to  be  memorized,  but  should  be  referred  to  frequently 
until  their  meaning  and  application  are  well  understood. 

By  the  skillful  application  of  this  principle  the  debits  and  the  credits 
of  every  business  transaction  may  be  determined. 

EXERCISE  12 

!FoR  Written  Work 

Make  an  exact  copy  of  the  model  journal,  page  2,  on  a  half  sheet 
of  loose  journal  paper.  If  journal  paper  is  not  available,  rule  a  sheet 
of  ordinary  writmg  paper  for  a  journal.  This  copy  must  be  exact  in 
every  detail. 

In  making  this  copy  omit  the  figure  1  in  the  page  column  of  the  model  journal. 

In  the  money  columns  at  the  right,  when  writing  an  even  number  of 
dollars,  put  a  dash  in  the  cents  column.  This  shows  that  an  omission 
has  not  occurred. 

Keep  this  copy  for  a  subsequent  exercise. 


EXERCISE  13 

DIRECTIONS  FOR  POSTING 

An  Account  is  a  collection  of  debits  and  credits  under  one  heading. 

An  account  may  contain  but  one  debit  or  one  credit. 

A  number  of  accounts  may  be  seen  in  the  model  ledger,  page  3. 

The  Ledger  is  a  book  containing  the  accounts  of  the  business. 
Posting  is  a  process  of  transferring  debit  and  credit  items  to  their  re- 
spective accounts  in  the  ledger. 

At  present,  all  posting  is  from  the  journal. 

The  posting  of  the  model  journal  is  on  page  3.  This  page  is  the 
model  ledger. 

Each  different  name  that  appears  in  the  model  journal  requires  an 
account  or  a  heading  of  the  same  name  in  the  ledger ;  therefore  there  are 


FUNDAMENTAL  PRINCIPLES  17 

«ir  accounts  in  the  model  ledger.    The  Proprietor's  account  is  usually 
the  first  in  the  ledger. 

To  Open  an  Account,  write  in  the  ledger,  as  a  heading,  the  name  to 
which  items  are  to  be  posted. 

Note  that  in  the  model  journal  the  debits  and  the  credits  of  merchandise  are  dis- 
tributed over  the  entire  page.  Then  note  that  in  the  model  ledger  the  debits  and 
the  credits  of  merchandise  appear  under  the  heading  of  Merchandise  in  one  section 
of  the  page,  entirely  apart  from  other  items  on  the  page.  Posting  brings  about  this 
classification  of  debits  and  credits  under  appropriate  headings. 

The  left  and  the  right  side  of  the  ledger  have  the  same  ruling;  the 
left  is  the  debit  side,  and  the  right  is  the  credit  side. 

Now  examine  the  posting  from  the  model  journal  to  the  model 
ledger. 

By  referring  to  the  script  set,  the  student  has  an  opportunity  to  study 
posting  in  just  the  form  in  which  it  will  appear  in  his  own  work. 

In  the  model  journal,  in  each  entry,  the  name  that  is  debited  appears  first,  and 
the  credit  appears  second.  The^rs^  money  column  records  the  amount  of  the  debit, 
and  the  second  money  column  records  the  amount  of  the  credit.  All  items  in  the 
first  money  column  will  be  posted  to  the  left  (debit)  side  of  the  ledger ;  all  items  in 
the  second  money  column  will  be  posted  to  the  right  {credit)  side  of  the  ledger. 

Now  trace  the  posting  of  each  debit  item  in  the  model  journal  to  the 
model  ledger. 

The  first  item  in  the  journal  is  Cash.  Turn  to  the  Cash  account  in  the  ledger, 
debit  side,  and  note  the  amount^  the  page  of  the  journal  from  which  the  item  was 
posted,  and  the  date.  Above  the  date  the  year  is  written.  The  page  of  the  ledger  is 
placed  at  the  left  of  Cash  in  the  journal.  The  placing  of  these  page  numbers  in 
both  ledger  and  journal  checks  the  posting ;  that  is,  shows  that  the  posting  has  been 
completed. 

The  next  debit  item  is  Expense.  Turn  to  the  Expense  account  in  the  ledger  and 
trace  the  amount,  the  page,  and  the  date.  Note  that  the  ledger  page  is  placed  at  the 
left  of  Expense  in  the  journal. 

In  this  manner  trace  the  posting  of  each  debit  item  in  the  journal. 

The  first  credit  item  in  the  journal  is  James  Wilson.  Turn  to  his  account  in  the 
ledger,  credit  side,  and  note  the  amount,  the  page,  and  the  date.  Above  the  date 
the  year  is  written.  The  page  of  the  ledger  is  placed  at  the  left  of  James  Wilson's 
name  in  the  journal. 

The  next  credit  item  is  Cash.  Turn  to  the  Cash  account  in  the  ledger,  credit  side, 
and  note  the  amount,  the  page,  and  the  date.  Remember  to  place  the  page  of  the 
ledger  at  the  left  of  Cash  in  the  journal. 

In  this  manner  trace  the  posting  of  each  credit  item  in  the  journal. 
Review  until  all  is  clearly  understood. 


18  BOOKKEEPIKG 


EXERCISE  14 
ANALYSIS  OF  THE  MODEL  LEDGER 

The  posting  of  the  model  journal  has  been  completed.  The  following 
is  a  full  explanation  of  each  account  in  the  model  ledger. 

Each  account  having  more  than  one  item  has  been  footed.  (The  minute  figures  in 
the  accounts  show  this  footing.)  These  footings  should  always  be  written  in  pencil. 
(See  model  ledger,  page  3.) 
James  Wilson's  account : 

The  credit  shows  that  he  invested  $2000  in  the  business. 

The  debit  shows  that  he  has  withdrawn  nothing  from  the  business. 
Cash  account : 

The  debit  shows  that  the  business  has  received  $2539. 

The  credit  shows  that  the  business  has  paid  out  $1415.40. 
Expense  account : 

The  debit  shows  that  value  was  received,  —  the  use  of  the  store,  which  cost  $50. 
Merchandise  account : 

The  debit  shows  that  the  business  has  bought  merchandise  to  the  amount 
of  $1565.40. 

The  credit  shows  that  the  business  has  sold  merchandise  to  the  amount  of  $639. 
D.  Simons's  account : 

The  debit  shows  that  he  became  indebted  to  the  business  to  the  amount  of  $244. 

The  credit  shows  that  he  paid  $144  on  his  indebtedness. 
O.  Lane's  account : 

The  credit  shows  that  the  business  became  indebted  to  him  to  the  amount 
of  $375.40. 

The  debit  shows  that  the  business  has  paid  $175.40  on  such  indebtedness. 

Similar  analyses  of  ledger  accounts  should  be  made  frequently. 

The  ledger  is  the  book  of  accounts  in  business  and  is  referred  to  very 
frequently  for  information  that  is  wanted  immediately  ;  therefore  one 
should  be  able  to  understand  an  ordinary  account  almost  at  a  glance. 
For  this  reason,  strong  emphasis  has  been  placed  on  the  analysis  of  ledger 
accounts  in  the  very  earliest  stages  of  the  student's  work  in  bookkeeping. 


EXERCISE  15 

TRIAL  BALANCE  OF  THE  MODEL  LEDGER 

The  script  trial  balance,  page  4,  is  a  trial  balance  of  the  model  ledger. 

The  trial  balance  is  simply  a  list  of  the  names  and  the  totals  of  each 
open  ledger  account  and  shows  that  the  debits  and  the  credits  are  equal. 

Study  this  trial  balance  carefully,  and  then  take  a  trial  balance  of  the 
model  ledger  and  compare  it  with  the  script  trial  balance. 


FUNDAMENTAL  PRINCIPLES 


19 


EXERCISE  16 
For  Written  Work 

Each  student  has  made  a  copy  of  the  model  journal  on  a  sheet  of 
journal  paper. 

Post  this  exercise,  using  a  half  sheet  of  loose  ledger  paper.  Allow 
ten  lines  for  each  account.  Write  the  accounts  in  the  same  order  as 
in  the  model  ledger.    Post  the  model  journal  a  second  time. 

In  posting,  write  the  name  of  the  month  and  the  year  at  the  head  of  each 
account  only  once,  and  do  not  use  ditto  marks. 

Post  all  the  debit  items  first,  and  then  all  the  credit  items. 

After  the  journal  items  have  been  transferred  to  the  ledger,  the  post- 
ing may  be  rechecked.    This  checking  is  usually  done  to  locate  an  error. 

Determine  whether  the  first  debit  item  in  the  journal  has  been  posted  correctly 
to  the  ledger.  If  it  has,  place  a  small  check  (  \/  )  in  pencil  at  the  left  of  the  first 
money  column  in  the  journal,  and  at  the  left  of  the  folio  column  in  the  ledger.  Use 
a  pencil  for  checking,  and  make  very  small  check  marks.  These  marks  should  not 
be  erased. 

The  following  script  illustrations  will  show  how  this  checking  should  be  done. 


C^L^^24.^^  C,  /f- 


3  /  ^ 


Z^ 


3/^ 


ZS 


/3 


J/^ 


ZJ 


Jl.c7:  ^^/ 


'3 


3/^/ZS 


Take  trial  balances  of  the  ledgers  just  posted. 
Keep  this  work  for  a  subsequent  exercise. 


\ 


20  BOOKKEEPING 

EXERCISE  17 

For  Written  Work 

Journalize  Exercise  2,  page  8,  in  the  same  form  as  the  model  journal. 
The  names  and  the  amounts  are  different  from  those  in  the  model. 

Under  Feb.  1  the  proprietor,  Edward  M.  Brown,  makes  a  cash  invest- 
ment of  llOOO.    (An  additional  item.) 

Make  the  memorandum  and  the  entry  for  this  investment,  and  then  journalize 
the  other  business  transactions. 

When  goods  are  bought,  an  invoice  is  received  by  the  buyer  and  placed  on  file ; 
for  this  reason  the  items  of  the  invoice  need  not  be  recorded  in  the  explanatory 
portion  of  the  journal. 

When  goods  are  sold,  an  invoice  is  sent  by  the  seller,  and  a  copy  of  it  is  not 
always  kept  on  file ;  for  this  reason  the  items  of  the  invoice  should  be  recorded  in 
the  explanatory  portion  of  the  journal. 

These  explanatory  portions  of  the  journal  are  held  to  be  of  great  value  in  courts 
of  law. 

Use  loose  half  sheets  of  journal  paper  and  ledger  paper.  In  the  ledger 
allow  ten  lines  for  each  account. 

Recheck  the  posting.    Take  a  trial  balance. 
Pass  all  work  to  the  instructor. 

EXERCISE  18 

For  Written  Work 

Journalize  Exercise  4,  page  9. 

Under  March  1  the  proprietor,  Richard  S.  Rowe,  makes  a  cash  invest- 
ment of  11200.    (An  additional  item.) 

Post  to  the  ledger  and  then  recheck  the  posting. 

Take  a  trial  balance. 

Pass  all  work  to  the  instructor. 

EXERCISE  19 

For  Written  Work 

Journalize  Exercise  5,  page  10. 

Under  April  1  the  proprietor,  James  A.  Murphy,  makes  a  cash  invest- 
ment of  ^1100.    (An  additional  item.) 

Post  to  the  ledger  and  then  recheck  the  posting. 

Take  a  trial  balance. 

Pass  all  work  to  the  instructor. 


FUNDAMENTAL  PRINCIPLES  21 

EXERCISE  20 

For  Written  Work 

Journalize  Exercise  7,  page  11. 

Under  May  1  the  proprietor,  Wm.  L.  Martin,  makes  a  cash  invest- 
ment of  J1250.    (An  additional  item.) 

Post  to  the  ledger  and  then  recheck  the  posting. 

Take  a  trial  balance. 

Pass  all  work  to  the  instructor. 

EXERCISE  21 
SET  B.  FURNITURE 

Journalize  the  transactions  in  this  set,  as  in  the  model  journal,  on  a 
half  sheet  of  journal  paper. 

As  a  class  exercise,  each  transaction  may  be  journalized  orally.  Give  the  reason 
for  each  debit  and  each  credit  named. 

Memoranda  of  Transactions 

Feb.  1,  Wm.  A.  Morton  began  the  Furniture  business  and  invested 
cash,  11800. 

2,  Paid  E.  R.  Law  cash,  for  rent  of  the  store  for  1  mo.,  $35. 
4.  Bought  of  Henry  Burke  for  cash : 

16  Library  Tables  at  $25 

6,  Sold  Case  &  Co.  for  cash : 

8  Library  Tables  at  $30 

8.  Bought  of  Henry  Ellis  on  account : 

12  Library  Tables  at  $22.50 

10.  Sold  John  E.  Smith  on  account : 

10  Library  Tables  at  $27.50 

13.  The  proprietor  withdrew  cash  for  personal  use,  $50. 

When  the  proprietor  makes  an  investment  the  business  receives  money  from  him, 
and  when  he  withdraws  money  for  his  own  use  the  business  gives  money  to  him ; 
therefore  the  entry  is  just  the  same  as  for  any  other  person  to  whom  money  is  paid. 

Id.  Bought  of  John  Hastings  for  cash : 

20  Library  Tables  at  $25 


22  BOOKKEEPING 

Feb.  19.  Sold  E.  W.  Harris  for  cash: 

15  Library  Tables  at  ^30 

23.  Paid  Henry  Ellis  cash,  to  apply  on  account,  tl50. 

25.  Received  of  John  E.  Smith  cash,  to  apply  on  account,  J175. 

27.  Paid  Howard  Green,  a  clerk,  cash  for  his  salary,  J 20. 

Inventory,  February  28,  19 — 

iVTpt*p nfiTiri isf^  * 

15  Library  Tables  at  |24.50  $367.50 

Note.   The  use  of  the  inventory  will  be  discussed  in  Exercise  23. 

Post  to  the  ledger ;  allow  ten  lines  for  each  account. 

Take  a  trial  balance. 

Keep  all  this  work  for  a  subsequent  exercise. 

EXERCISE  22 

^  SET  C.   GRAIN  AND  SEED 

Journalize  the  transactions  in  this  set  in  the  same  form  as  the  model 
journal,  on  a  half  sheet  of  loose  journal  paper. 

As  a  class  exercise,  each  transaction  may  be  journalized  orally.    Give  the  reason 
for  each  debit  and  each  credit  named. 

Memoranda  of  Transactions 

March  1.  Student  begins  the  Grain  and  Seed  business  and  invests 
cash,  11500. 

2.  Pay  Harold  Brown  cash,  for  rent  of  the  store  for  1  mo.,  $40. 

3.  Buy  of  H.  H.  Morley  for  cash : 

400  bu.  Corn  at  48^  350  bu.  Oats  at  35^ 

4.  Sell  Smith  Bros,  for  cash : 

200  bu.  Corn  at  60^  100  bu.  Oats  at  42^ 

6.  Buy  of  Grace  &  Co.  for  cash,  office  books  and  stationery,  |14.50. 
What  is  the  name  of  the  account  that  is  debited  ? 

8.  Buy  of  Wm.  A.  Cannon,  on  account : 

250  bu.  Wheat  at  $1  15  bu.  Clover  Seed  at  |6 

10.  Sell  James  A.  Butler,  on  account : 

150  bu.  Corn  at  61^  200  bu.  Oats  at  43^ 


FUNDAMENTAL  PRINCIPLES  23 

March  13.  Pay  Wm.  A.  Cannon  cash,  to  apply  on  account,  J 200. 

15.  Buy  of  the  Larkin  Coal  Co.  for  cash,  2  T.  coal,  for  office  use, 
at  t5.50. 

17.  Receive  of  James  A.  Butler  his  note  at  10  da.,  to  apply  on 
account,  |100. 

What  name  is  given  to  Ms  note  ? 

20.  Sell  A.  R.  Burton  for  cash : 

8  bu.  Clover  Seed  at  $7.50 

22.  Give  Wm.  A.  Cannon  your  note  at  30  da.,  to  apply  on  account, 
JIOO. 

What  name  is  given  to  your  note  ?  .    ~" 

23.  Sell  Henry  A.  Barker,  on  account : 

120  bu.  Wheat  at  $1.20 

24.  Receive  of  James  A.  Butler  cash,  to  balance  his  account,  $77.50. 

25.  Withdraw  from  the  business  cash,  for  personal  use,  $75. 

26.  Receive  of  Henry  A.  Barker  cash,  to  apply  on  account,  $100. 

27.  Receive  of  James  A.  Butler  cash,  for  his  note  due  to-day,  $100. 

What  is  the  debit  in  this  transaction  ?  the  credit  ? 

29.  Buy  of  Johnson  &  Co.  for  cash : 

100  bu.  Corn  at  500  100  bu.  Oats  at  350 

30.  Sell  Harding  &  Co.  for  cash: 

50  bu.  Corn  at  620  50  bu.  Oats  at  440 

31.  Pay  James  A.  Norton,  a  clerk,  cash,  for  his  salary,  $22.50. 


Inventories,  March  31,  19- 


Merchandise : 

100  bu.  Corn  at  500 
100  bu.  Oats  at  350 
130  bu.  Wheat  at  $1 
7  bu.  Qlover  Seed  at  $6 

$50. 

35. 
130. 

42. 

Expense : 

Office  Books 
1  T.  Coal 

$10. 
5.50 

$257. 


$15.50 


Note.  The  use  of  the  inventory  will  be  discussed  in  Exercise  23. 


24 


BOOKKEEPING 


Post  to  the  ledger ;  allow  fifteen  lines  for  the  Cash  account,  and  ten 
lines  for  all  other  accounts. 

Before  taking  a  trial  balance  rule  the  accounts  in  the  ledger  that 
balance.  The  script  illustrations  herewith  show  how  to  rule  them.  Rule 
the  accounts  of  James  A.  Butler  and  Bills  Receivable. 


^i 


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III    '"" 



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6 

3 

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3 

/OO 

— 

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/^ 

ZO 

4^ 

z6o 

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2J 

J- 

^6 

S(P 

J(P 

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— 

c=. 

so/. 

7J 

4. 

X^(^ 

7J 

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2-/7/ 

u. 

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Take  a  trial  balance. 

Keep  all  this  work  for  a  subsequent  exercise. 


EXERCISE  23 

For  Oral  axd  Written  Work 
IKYENTORIES  AND  THE  CLASSIFICATION  OF  ACCOUNTS 

The  student  may  verify  the  inventory  given  in  Set  A,  as  follows : 

How  many  barrels  of  flour  were  bought  ?  How  many  barrels  were 
sold  ?    How  many  barrels  should  be  on  hand  ? 

How  many  barrels  of  salt  were  bought?  How  many  barrels  were 
sold  ?    How  many  barrels  should  be  on  hand  ? 

An  Inventory  is  an  itemized  statement  of  the  value  of  the  goods  on  hand. 

An  inventory  is  usually  taken  at  cost  prices. 

An  inventory  of  merchandise  is  never  found  by  taking  the  balance  of  the  merchan- 
dise account.  This  is  true  because  the  cost  prices  and  the  sale  prices  are  not  the 
same,  and  the  true  condition  of  the  account  can  be  shown  only  by  using  the 
inventory. 


FUNDAMENTAL  PRINCIPLES  '  25 

Expense  and  other  items  are  inventoried  frequently. 

This  is  true  because  only  a  part  of  that  which  was  charged  to  Expense  may  have 
been  consumed  or  disposed  of. 

The  inventories  in  each  set  should  be  copied  into  the  journal  imme- 
diately following  the  last  journal  entry. 

Unless  otherwise  instructed,  date  each  inventory  under  the  last  day  of 
the  month  in  which  the  set  was  written. 

The  inventories  are  recorded  in  the  journal  as  a  matter  of  convenience.  In  busi- 
ness, it  is  a  common  practice  to  make  out  the  complete  inventory  on  sheets  of  paper ; 
these  sheets  are  then  bound  and  filed  for  subsequent  use. 

In  working  out  the  following  classification  of  accounts,  refer  to  the 
model  ledger  and  the  model  trial  balance  on  pages  3  and  4. 

In  the  Merchandise  account,  what  are  the  total  purchases?  the  total 
sales  ?  What  is  the  value  of  the  goods  on  hand  (the  inventory)  ?  Now 
it  can  be  determined  if  any  gain  has  been  realized. 

By  putting  together  the  amount  of  the  goods  sold,  the  credit,  and  the 
value  of  the  goods  on  hand  (the  inventory),  the  money  value  of  the  Mer- 
chandise account  at  the  close  of  the  month  is  shown :  |639  -f  $1026  = 
11665.  These  goods  cost  (the  debit)  |1565.40  ;  the  difPerence  ($1665  - 
$1565.40)  is  $99.60,  the  gain. 

To  summarize,  using  two  methods : 

No.  1  No.  2 

Merchandise :  Merchandise : 

Cr.  $639.  Cr.,  sales                              $639. 

Inv.  1026.  Dr.,  cost              $1565.40 

Total  $1665.  Less  inv.               1026. 

Dr.  1565.40  Cost  of  sales                         539.40 

Gain  $99.60  Gain                                      $99.60 

In  the  work  of  this  text  the  first  form  will  be  used.  Note  the  working  out  of  this 
result  in  the  model  statement,  page  4. 

Refer  to  the  Expense  account.  What  was  the  expenditure  to  carry 
on  the  business  for  the  month  ?    This  is  a  loss.    Why  ? 

If  the  gain  on  merchandise  is  $99.60  and  the  loss  on  expense  is  $50, 
what  is  the  net  gain,  that  is,  the  excess  of  the  gain  over  the  loss  ? 

Find  the  net  gain  in  each  of  the  following,  and  make  a  written  state- 
ment according  to  the  model,  page  4. 

1.  Merchandise  account:  debit,  $655.20 ;  credit,  $503.50 ;  inventory, 
$254.25.    Expense  account :  debit,  $55. 


26  '  BOOKKEEPING 

2.  Merchandise  account:  goods  bought,  1732.50;  goods  sold,  $525; 
goods  on  hand,  $310.    Expense  account:  debit,  $45. 

3.  Merchandise  account :  debit,  $1235.25;  credit,  $894.75;  inventory, 
$521.50.    Expense  account:  debit,  $75. 

4.  Merchandise  account:  goods  bought,  $1052.60;  goods  sold,  $825; 
goods  on  hand,  $410.15.    Expense  account:  debit,  $60. 


EXERCISE  24 

For  Oral  and  Written  Work 
CLASSIFICATION  OF  ACCOUNTS 

In  working  out  this  exercise  refer  to  the  model  ledger  and  the  trial 
balance  on  pages  3  and  4. 

Refer  to  the  Cash  account  in  the  trial  balance.  What  is  the  total  cash 
received  ?  the  total  paid  out  ?  the  balance  on  hand  ?  Is  this  balance  a 
resource  (property  on  hand)  or  a  liability  (amount  owed)  ? 

What  is  the  condition  of  D.  Simons's  account?  Does  he  owe  the 
business,  or  does  the  business  owe  him  ?  Is  the  balance  a  resource  or 
a  liability  ? 

If  he  owes  the  business,  the  amount  owed  is  a  resource. 

What  is  the  condition  of  O.  Lane's  account  ?    Does  the  business  owe 
him,  or  does  he  owe  the  business  ?   Is  the  balance  a  liability  or  a  resource  ? 
If  the  business  owes  him,  the  amount  is  a  liability. 

Is  the  merchandise  on  hand  (inventory)  a  resource  or  a  liability  ? 
For  the  present,  treat  all  inventories  as  resource  items. 

The  difference  between  the  resources  and  the  liabilities  is  the  capital,  or 
the  present  worth. 

In  the  Proprietor's  account,  James  Wilson,  what  is  the  total  invest- 
ment ?  the  total  withdrawal  ?  the  net  investment  (the  balance  of  the 
Proprietor's  account)  ? 

If  James  Wilson's  net  investment  is  $2000  and  the  business  has  gained 
for  him  $49.60  above  all  losses,  what  is  he  worth  on  January  31  ? 

In  the  above  exercises  it  is  clear  that  each  open  account  (an  account  that  does  not 
balance)  has  a  positive  bearing  on  the  condition  of  the  business,  and  if  these  results 
are  properly  classified,  both  what  has  been  accomplished  by  the  business  and  the 
present  state  of  affairs  may  be  determined. 

In  business,  these  results  are  usually  set  forth  at  stated  periods,  either  once  or 
twice  a  year. 


FUNDAMENTAL  PRINCIPLES  27 

EXERCISE  25 
TERMS  DEFINED  AND  EXPLAINED 

Books  are  kept  for  the  purpose  of  determining  the  results  and  the 
condition  of  the  business. 

The  Results  are  shown  by  the  gains  realized,  or  the  losses  sustained. 
A  formal  statement  of  losses  and  gains  is  usually  called  a  Business 
Statement. 

The  Condition  is  shown  by  the  resources  and  the  liabilities. 
A  formal  statement  of  resources  and   liabilities  is  usually  called  a 
Financial  Statement. 

The  Net  Gain  is  the  excess  of  gains  over  losses. 
The  Net  Loss  is  the  excess  of  losses  over  gains. 

Resources  or  Assets  are  property  belonging  to  the  business,  or  amounts 
due  the  business. 

Liabilities  are  amounts  owed  by  the  business. 

The  Present  Worth  or  Capital  is  the  excess  of  resources  over  liabilities ; 
the  excess  of  liabilities  over  resources  is  Insolvency. 
In  all  loss  and  gain  accounts : 

If  the  credit,  including  the  inventory,  is  the  larger,  the  account  shows 
a  gain. 

If  the  debit,  including  the  inventory,  is  the  larger,  the  account  shows 
a  loss. 

Gains  are  realized : 

If  resources  increase  and  liabilities  remain  unchanged. 
If  liabilities  decrease  and  resources  remain  unchanged. 
If  resources  increase  and  liabilities  decrease. 
Losses  are  sustained; 

If  liabilities  increase  and  resources  remain  unchanged. 
If  resources  decrease  and  liabilities  remain  unchanged. 
If  liabilities  increase  and  resources  decrease. 
In  personal  accounts : 

If  the  debit  is  the  larger,  the  account  shows  a  resource. 
If  the  credit  is  the  larger,  the  account  shows  a  liability. 
If  a  personal  account  is  given  up  as  not  collectible,  it  then  shows  a  loss. 

In  the  introductory  part  of  the  text  all  inventories  are  resources. 

A  trial  balance  is  a  copy  of  the  ledger,  only  in  a  more  convenient  form. 

The  bookkeeping  thus  far  explained  is  in  double-entry  form,  and  the 
cardinal  principle  of  double-entry  bookkeeping  is  Equal  Debits  and  Equal 
Credits. 


28 


BOOKKEEPING 


EXERCISE  26 

A  Written  Review 

Herewith  are  a  number  of  trial  balances  from  which  statements  of 
conditions  are  to  be  made,  using  loose  sheets  of  journal  paper. 

As  an  oral  exercise,  it  piay  be  first  determined  which  accounts  show 
resources  or  liabilities,  losses  or  gains. 

Note.   Unless  otherwise  instructed,  use  the  form  of  statement  given  on  page  4. 

Then  make  the  statements,  as  follows : 

1.  Copy  the  trial  balance  at  the  head  of  the  journal  page. 

2.  The  Loss  and  Gain  Statement,  showing  the  7iet  gain. 

3.  The  Resource  and  Liability  Statement,  showing  the  present  worth. 

4.  The  proof  or  verification  of  the  statements. 
Date  each  statement  Jan.  31,  19 — . 

Pass  all  work  to  the  instructor  for  approval. 

No.  1 


Student 
Cash 
Mdse. 
Expense 
R  Gross 
M.  King 
J.  Howe 
F.  Young 


$200 

1685 

2470 

75 

310 

342 

219 

524 


12200 

750 

1873 

100 
250 
452 
200 


Student 
Cash 
Expense 
Mdse. 

C.  Mason 

D.  Koe 
S.  Miller 

E.  Lane 


No.  2 

1100 

1755 

85 

2250 

325 

485 
505 


$1900 
1325 

1935 

235 
110 


$5825 

$5825 

Inventory  : 

Merchandise 

$725 

No.  3 

Student 

$200 

$2500 

Cash 

1680 

844 

Mdse. 

2640 

1850 

Expense 

75 

A.  Ward 

300 

800 

E.  Dunn 

420 

120 

L.  Jones 

360 

60 

M.  Martin 

800 

100 

B.  Lewis 

299 

500 

$6774 

$6774 

$5505 

$5505 

Inventory  : 

Merchandise 

$475.25 

No.  4 

Student 

$100 

$1700 

Cash 

1425 

610 

Expense 

65 

Mdse. 

1820 

1260 

A.  Crane 

380 

120 

S.  Adams 

100 

400 

C.  Lyman 

450 

130 

D.  Owen 

200 

500 

H.  Howe 

180 

$4720 

$4720 

Inventory  : 

Merchandise  $921.40 


Inventory  : 

Merchandise  $742.50 


FUNDAMENTAL  PRINCIPLES  29 

EXERCISE  27 

For  Written  Work 

In  this  exercise  use  the  trial  balances  the  student  has  made  in  Sets  A, 
B,  and  C.    Follow  the  directions  given  in  Exercise  26. 

This  work  should  be  done  without  reference  to  the  textbook. 

After  each  statement  is  approved  by  the  instructor,  keep  all  work 
for  a  subsequent  exercise. 

Make  statements  from  the  following  trial  balances ;  the  inventories 
will  be  found  in  the  textbook  at  the  close  of  each  set: 

1.  Exercise  9,  Set  A.     2.  Exercise  21,  Set  B.     3.  Exercise  22,  Set  C. 
The  Expense  Inventory 

The  Expense  inventory  is  made  up  of  items  which  when  bought  were  charged  to 
Expense ;  the  unused  portion,  at  the  time  of  making  the  statements,  constitutes  the 
inventory. 

Illustration :  If  10  T.  coal  were  bought  at  the  beginning  of  the  month,  and  4  T. 
were  unconsumed  at  the  end  of  the  month,  the  4  T.  would  constitute  the  inventory. 

When  there  is  an  expense  inventory,  the  loss  on  Expense  is  found  as 
follows: 

Expense : 

Dr.  $65.50 

Inv.  15.50 

Loss  $50 

The  loss  is  the  difference  between  the  debit  of  the  account  and  the 
inventory. 

In  making  the  resource  and  liability  statement,  record  the  expense  in- 
ventory as  a  resource^  just  the  same  as  the  merchandise  inventory.  In 
the  loss  and  gain  statement,  subtract  the  inventory  from  the  debit  of 
expense,  as  shown  in  the  above  illustration. 

It  is  unusual  for  the  Expense  account  to  have  any  credits.  If  some 
item  that  was  debited  to  expense  when  bought  should  be  sold,  then 
expense  would  be  credited. 

If  a  man  bought  a  safe  for  $80,  his  entry  would  be :  Expense.,  $60, 
Cash,  $60;  if  he  sold  it  for  $50,  his  entry  would  be:  Cash,  $50, 
Expense,  $50.  After  posting  these  entries,  there  will  be  both  a  debit  and 
a  credit  item  in  the  ledger  account  of  Expense. 


30 


BOOKKEEPING 


ElfERCISE  28 
For  Written  Work 

The  results  and  the  condition  of  the  business  in  Sets  A,  B,  and  C  have 
been  shown  by  the  statements  just  made.  The  next  step  is  to  show  the 
results  of  the  business  in  the  ledger.  To  do  this  it  will  be  necessary  to 
close  the  Loss  and  Gain  Accounts  in  the  ledger. 

To  close  the  ledger  it  is  necessary  to  close  only  such  accounts  as  affect 
the  results  shown  by  the  business ;  •  that  is,  the  accounts  that  show  loss  or 
gain  and  the  Proprietor's  account. 

Preparatory  to  closing  the  ledger  the  student  should  have  some  exer- 
cises in  ruling. 

The  ruling  of  the  following  ledger  page  is  the  same  as  the  ruling  re- 
quired in  closing  a  ledger  account.  Practice  this  ruling  until  it  is  done 
well.    Use  red  ink  for  this  exercise. 

Notice  that  the  single  line  extends  over  only  the  dollars  and  cents  columns,  while 
the  double  lines  cover  all  the  perpendicular  columns,  the  explanatory  column  excepted. 


In  business  it  is  customary  to  show  actual  results,  that  is,  make  business 
and  financial  statements  only  once  or  twice  a  year.  The  ledger  is  closed 
after  such  statements  have  been  made. 


•      EXERCISE  29 

CLOSING  THE  LEDGER 

The  following  script  page  is  an  illustration  of  a  ledger  closed  prop- 
erly.   Study  the  following  explanations  in  connection  with  this  page. 
To  close  the  Merchandise  account : 
1.  Enter  the  inventory  on  the  credit  side,  in  red  ink. 


FUNDAMENTAL  PRINCIPLES. 


31 


Ledger  Closed 


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32  .  BOOKKEEPING 

2.  Find  the  difference  between  the  sides  of  the  account,  the  inventory 
included.    This  difference  is  the  gain. 

3.  Enter  the  gain  on  the  debit  side,  in  red  ink,  under  Loss  and 
Gain. 

4.  Rule  and  foot  the  account ;  write  the  footings  in  black  ink. 

5.  Bring  the  inventory  below  the  rulings,  on  the  debit  side,  in  black 
ink,  under  Feb.  1. 

6.  Transfer  the  gain  to  the  credit  side  of  the  Loss  and  Gain  account, 
in  black  ink,  under  Jan.  31. 

The  principle  of  equal  debits  and  equal  credits  must  be  rigidly  enforced ;  there- 
fore the  entries  in  red  ink,  as  the  inventory  and  the  gain,  must  be  transferred  to  the 
opposite  side  of  the  ledger.   This  was  accomplished  as  directed  in  5  and  6. 

To  close  the  Expense  account : 

1.  Enter  the  inventory  on  the  credit  side,  in  red  ink. 

2.  Find  the  difference  between  the  sides  of  the  account,  the  inventory 
included.    This  difference  is  the  loss. 

3.  Enter  the  loss  on  the  credit  side,  in  red  ink,  under  Loss  and  Gain. 

4.  Rule  and  foot  the  account. 

5.  Bring  the  inventory  below  the  rulings,  on  the  debit  side,  in  black 
ink,  under  Feb.  1. 

6.  Transfer  the  loss  to  the  debit  side  of  the  Loss  and  Gain  account,  in 
black  ink,  under  Jan.  31. 

If  there  is  no  inventory  in  this  account,  simply  enter  the  debit  footing  as  a  loss. 
See  illustration  on  page  5. 

To  close  the  Loss  and  Gain  account : 

1.  Enter  the  difference  between  the  sides  of  this  account  as  net  gain, 
on  the  ^e^Y  "side,"  ill  Ted -ink.- — ..  

2.  Rule  and  foot  the  account. 

3.  Transfer  the  net  gain  to  the  credit  side  of  the  Proprietor's  account. 

To  close  the  Proprietor's  account : 

1.  The  net  gain  has  been  entered  on  the  credit  side,  in  black  ink, 
under  Jan.  31. 

2.  Find  the  difference  between  the  sides  of  the  account,  the  net  gain 
included.    This  difference  is  the  present  worth. 

3.  Enter  the  present  worth  on  the  debit  side,  in  red  ink,  under  Jan.  31. 

4.  Rule  and  foot  the  account. 

5.  Bring  the  present  worth  below  the  rulings,  on  the  credit  side,  in 
black  ink,  under  Feb.  1. 

The  student  will  now  make  an  exact  copy  of  the  closed  ledger  on 
page  5.    Use  a  half  sheet  of  ledger  paper. 


FUNDAMENTAL  PRINCIPLES 


33 


EXERCISE  30 


For  Written  Work 


On  slips  of  ledger  paper  find  the  gain  or  the  loss  in  each  of  the  follow- 
ing accounts : 

1.  Merchandise :  debit,  $650 ;  credit,  $425 ;  inventory,  $310. 

2.  Expense:  debit,  $55;  inventory,  $25. 

3.  Merchandise:  debit,  $840;  credit,  $525;  inventory,  $415. 

4.  Expense:  debit,  $40. 

5.  Merchandise:  debit,  $565;  credit,  $339;  inventory,  $319.50.     - 

6.  Expense:  debit,  $74.50;  inventory,  $35. 

Find  the  net  gain  or  the  present  worth  in  each  of  the  following  accounts 

1.  Loss  and  Gain:  debit,  $86.45;  credit,  $92.50. 

2.  Proprietor:  debit,  $75;  credit,  $1750;  net  gain,  $120. 

3.  Loss  and  Gain:  debit,  $43.25;  credit,  $76.40. 

4.  Proprietor:  debit,  $50;  credit,  $1600;  net  gain,  $61.25. 
^;  Make  an  exact  copy  of  the  closed  ledger  on  page  31. 


EXERCISE  31 

For  Written  Work 

On  a  half  sheet  of  ledger  paper  open  the  following  accounts;  allow 
ten  lines  for  each  account. 


Student,  Proprietor 


19— 

Jan. 


23 


100 


19- 

Jan. 


2000 


Merchandise 


19- 

— 

19— 

— 

Jan. 

7 

3 

900 

Jan. 

9 

2 

750 

13 

4 

200 

24 

3 

275 

26 

4 

135 

34 


BOOKKEEPING 
Expense 


19— 

Jan. 


10 

27 


25 
10 


Inventory : 

Merchandise 

Open  a  Loss  and  Gain  account ;  close  the  ledger. 


$350 


II 
W.  A.  Jones,  Proprietor 


19— 

Feb. 


21 


50 


19- 

Feb. 


1900 


Merchandise 


19— 

— 

19— 

— 

Feb. 

4 

3 

250 

Feb. 

8 

3 

175 

20 

15 

4 

455 

25 

18 

4 

310 

50 

21 

5 

536 

75 

25 

5 

502 

70 

Expense 


19- 

Feb. 


50 
35 


Inventories : 

Merchandise 
Expense 


$450 
25 


Open  a  Loss  and  Gain  account ;  close  the  ledger. 


FUNDAMENTAL  PRINCIPLES 


35 


III 

Student,  Proprietor 


ID- 
Mar. 


Merchandise 


1850 


19- 

— 

19— 



— 

Mar. 

3 

1 

525 

60 

Mar. 

8 

2 

385 

25 

15 

2 

326 

70 

17 

2 

250 

22 

3 

516 

10 

25 

3 

457 

80 

26 

4 

110 

30 

4 

225 

35 

Expense 


19— 

Mar. 


1 

55 

1 
20 

2 

30 

2 

10 

25 

Inventories : 

Merchandise 
Expense 

Open  a  Loss  and  Gain  account ;  close  the  ledger. 


$510.50 
42.50 


EXERCISE  32 


For  Written  Work 


The  ledgers  which  the  student  posted  and  kept  will  now  be  used  for  this  exer- 
cise.  After  closing  each  ledger  keep  it  for  a  subsequent  exercise. 

In  each  ledger  open  a  Loss  and  Gain  account,  immediately  following 
the  last  account  on  the  page.    Use  the  inventories  given  in  the  text. 

1.  Set  A.    Close  the  ledger.    Compare  the  results  with  those  shown 
in  the  statement  of  this  set. 

2.  Set  B.    Close  the  ledger.    Compare  the  results  with  those  shown 
in  the  statement  of  this  set. 


36 


BOOKKEEPING 


3.  Set  C.  Close  the  ledger.  Compare  the  results  with  those  shown 
m  the  statement  of  this  set. 

After  closing  the  above-named  ledgers,  close  the  Cash  account  in  each 
by  balance,  according  to  the  following  model : 


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Closing  an  account  by  balance  has  nothing  whatever  to  do  with  closing  the  ledge^. 

After  closing  the  above  account  the  condition  of  it  is  shown  as  a  single  item,  the 
balance. 

It  is  sometimes  a  great  convenience  to  close  an  account  by  balance  when  it  covers 
a  large  part  of  the  ledger  page,  even  before  it  is  necessary  to  transfer  the  balance 
to  a  new  sj^ace. 

Any  account  may  be  closed  by  balance  when  the  space  assigned  to  it 
is  filled  and  it  is  necessary  to  transfer  it  to  a  new  space. 

It  is  often  desirable  to  close  any  account  when  it  balances ;  this  form 
of  closing  is  shown  on  page  24. 

Bed  ink  is  used  commonly  for  rulings  of  all  kinds,  for  closing  entries 
in  the  ledger,  and  for  records  that  require  emphasis.  In  closing,  the 
ledger  entries  to  be  transferred  to  some  other  place  are  usually  Avritten 
in  red  ink,  and  entries  that  have  been  transferred  from  some  other  source 
are  always  written  in  black  ink.  The  transfer  is  necessary  to  preserve 
the  balance  or  equality  of  the  ledger. 

The  use  of  red  ink  is  largely  a  matter  of  custom.  Many  bookkeepers  use  no  red 
ink  at  all,  insisting  that  it  is  a  waste  of  time  to  change  from  one  color  to  another. 
The  use  of  red  ink  is  advised  for  exercises  in  this  book. 


11^ 


vPu:npamental  principles  37 

EXERCISE  33 

SET  D.  HARDWARE 

Journalize  the  following  transactions,  post,  take  a  trial  balance,  make 
the  two  statements,  close  the  ledger ;  close  the  Cash  account  by  balance, 
and  then  take  a  second  trial  balance. 

Write  on  loose  sheets  of  journal  paper  and  ledger  paper. 

If  the  student  is  able  to  do  this  work  without  assistance,  he  is  ready  for  sub- 
sequent work ;  if  not,  he  should  rewrite  one  or  more  of  the  preceding  sets. 

Memoranda  of  Transactions 

.  April  1.  A.  W.  Tenny  began  the  Hardware  business,  investing  cash, 
♦3000. 

3.  Bought  of  E.  M.  Chase  &  Son,  on  account,  their  complete  stock 
of  hardware,  which  inventories  at  |2500. 

5,  Sold  A.  S.  Osborn  for  cash  : 

5  doz.  Coal  Hods  at  $7.50  10  doz.  Hammers  at  |6 

8.  Sold  A.  L.  Sanford  on  account : 

12  doz.  Door  Knobs  at  750  5  doz.  Lanterns  at  |6 

•  20  doz.  Planes  at  |24 

10.  Paid  A.  W^JBates  cash,  for  rent  of  the  store  for  1  mo.,  $60. 
12.  Paid  Wetm^e  &  SoiT5hish,  for  office  books,  per  bill,  |22.50. 
15.  Paid  A.  H.  Robbins  cash,  for  office  safe,  |65. 

18.  Received  of  A.  L.  Sanford  cash,  to  apply  on  account,  $125. 

19.  Sold  W..  L.  Hunter  on  account : 

5  doz.  Coal  Hods  at  $8  6  doz.  Door  Knobs  at  |1 

15  doz.  Hammers  at  |6  10  Ice-cream  Freezers  at  |2.50 

5  doz.  Lanterns  at  $6 

20.  Paid  E.  M.  Chase  &  Son  cash,  to  apply  on  account,  $1000. 
23.  Received  of  W.  L.  Hunter  cash,  to  apply  on  account,  |150. 
25.  The  Proprietor  withdrew  cash,  for  personal  use,  $50. 

27.  Gave  E.  M.  Chase  &  Son  a  note  at  10  da.,  to  apply  on  account, 
$1000.  '"- 

29.  Received  of  A.  L.  Sanford  his  note  at  10  da.,  to  apply  on  account, 
$300. 

30.  Paid  E.  M.  Chase  &  Son  cash,  to  apply  on  account,  $250. 
30.  Paid  E.  L.  Harris,  a  clerk,  cash  for  his  salary,  $25. 


38 


BOOKKEEPING 
Inventories,  April  30,  19 — 


Merchandise 
Expense : 

Office  Books  and  Stationery 

Office  Safe    ' 


12035 


♦15 

65     t80 


Allow  ten  lines  for  each  account  in  the  ledger. 

In  the  resource  and  liability  statement,  bills  receivable  are  always  a 
resource^  and  bills  payable,  always  a  liability. 


>■ 


EXERCISE  34 


CORRECTION  OF  ERRORS 


The  correction  of  errors  in  books  of  record  is  a  matter  of  special 
importance.  Even  careful  workers  make  occasional  errors,  but  correc- 
tions can  be  made  so  that  the  neatness  of  the  books  and  their  legal  value 
are  not  affected.  When  an  error  is  made,  consult  the  instructor  before 
attempting  to  correct  it.    Do  not  erase. 

If  a  journal  entry  is  wrong,  correct  it  as  follows:  Draw  a  red  line 
through  the  wrong  name,  and  then  write  the  correct  name  either  above 
or  at  the  right  of  the  correction,  as  follows : 


^^ 


52^y 


^^T'T'-O-Li^  aCu^€^jt0-aii;^^ 


/  oz 


J-0 


/  C?  2- 


J"<J7 


If  a  journal  entry  is  reversed,  it  may  be  corrected  by  writing,  in  red 
ink.,  Cr.  after  the  debit  item  and  Br.  after  the  credit  item.  Then  post 
correctly. 


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If  it  is  found  that  a  wrong  amount  has  been  entered  in  the  ledger, 
correct  as  follows : 

1.  Rule  a  red  line  through  the  wrong  amount. 

2.  Write  the  correct  amount  in  black  ink  just  above  the  amount 
canceled. 


FUNDAMENTAL  PRINCIPLES 


39 


If  an  amount  has  been  entered  on  the  wrong  side  of  the  ledger,  correct 
it  as  follows : 

1.  Draw  a  red  line  through  the  amount  that  is  wrong. 

2.  Enter  the  correct  amount  in  black  ink  on  the  proper  side  of  the 
ledger. 


~^  a^J^Ji^ 


Note.  Sometimes  a  correction  may  be  made  by  a  counter  entry  in  the  journal.  To 
illustrate :  Suppose  one  had  made  this  entry,  Mdse.,  Dr.,  Cash,  Cr.,  and  it  was  a  wrong 
entry.  It  may  be  canceled  as  follows  :  Cash,  Dr.,  Mdse.,  Cr.  As  the  wrong  entry  is  thus 
disposed  of,  the  correct  entry  may  now  be  made. 


FORMS  OF  STATEMENTS 

Business  and  financial  statements  are  made  in  many  different  forms, 
depending  on  the  character  and  the  volume  of  the  business,  and  the  facts 
that  are  to  be  set  forth. 

In  a  business  under  the  control  of  one  proprietor,  a  very  simple  state- 
ment may  answer  every  requirement.  In  a  partnership,  when  a  number 
of  persons  are  interested,  a  more  complete  setting  forth  of  the  facts  of 
the  business  is  necessary.  In  a  corporation,  organized  under  the  laws  of 
the  state  or  the  nation,  the  statements  must  show  the  results  and  the 
condition  according  to  the  demands  of  the  authority  under  which  the 
corporation  is  organized.  In  cities  where  many  departments  require 
separate  accounting,  still  another  form  of  statement  may  be  demanded 
to  set  forth  the  facts  that  public  business  requires  to  be  made  known. 

On  pages  4  and  40  simple  statement  forms  are  presented.  The  first  is 
recommended  for  the  beginner. 

As  the  student  advances  in  the  work  of  this  text  he  will  become 
familiar  with  other  forms  of  statements. 


40 


BOOKKEEPING 


THE    SIX-COLUMN    STATEMENT 

The  following  script  model  represents  a  form  of  statement  which 
affords  condensed  information  regarding  the  results  and  the  condition  of 
the  business.  The  first  two  columns  are  the  trial  balance.  The  inven- 
tories are  recorded  in  the  proper  columns,  either  resource  or  liability,  in 
red  ink,  to  distinguish  them  from  other  resources  and  liabilities.  After 
recording  the  inventories,  each  account  in  the  trial  balance  should  be 
extended  into  the  column  where  it  belongs.  The  footings  show  the  vari- 
ous column  totals,  and  the  summary  at  the  bottom  sets  forth  the  net 
gain  and  the  present  worth. 


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CREDIT 

LOSS 

GAIN 

RESOURCES 

LIABILITIES 

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76 

73 

7f 

3/7<S 

7f 

4^/33 

a/ 

^/33 

iP/ 

*  To  be  written  in  red  ink. 


SET  I.   RETAIL  FUEL  AND  FEED  BUSINESS 

The  Object  of  this  set  is  to  illustrate  in  a  practical  manner  one  of  the 
simplest  forms  of  bookkeeping.  In  the  preceding  illustrative  work  the 
student  has  recorded  all  transactions  and  entries  on  loose  sheets  of  journal 
paper  and  ledger  paper,  but  now  he  is  given  a  set  of  bound  books,  in 
which  all  records  will  be  made. 

The  Books  used  are  the  journal,  the  ledger,  and  the  statement  book. 
No  business  forms  are  handled,  but  different  forms  are  illustrated,  and 
entries  are  made  directly  from  them. 

Directions  and  Suggestions.  In  working  out  this  set  the  student  should 
observe  the  following : 

1.  For  the  introductory  memorandum,  refer  to  the  model  journal  on 
page  2.    Follow  this  model  carefully. 

2.  In  this  beginning  work  it  is  well  for  the  student  to  journalize  the 
transactions  first  on  a  loose  sheet  of  journal  paper ;  after  correction,  this 
work  may  be  copied  into  the  bound  journal.  The  posting  should  be 
directly  to  the  ledger. 

3.  A.  M.  Benton  is  represented  as  the  proprietor. 

4.  Use  the  same  explanatory  forms  as  in  the  model  journal. 

5.  The-  books  should  be  paged  consecutively,  1,  2,  3,  etc. 

6.  Take  pains  in  all  writing ;  make  neat,  small  figures. 

Price  List  for  January 


Article 

Cost 

Selling  Price 

Grate  Coal 

$6.10 

$7.25        '. 

Stove  Coal 

16.25 

$7.50 

Nut  Coal 

$6.20 

$7.50 

Hay 

$10.50 

$14.50 

Memoranda  of  Transactions  for  January 

Jan.  1.  A.  M.  Benton,  Buffalo,  N.Y.,  began  the  Retail  Fuel  and  Feed 
business,  investing  cash,  $2750. 

2,  Paid  Edward  N.  Shaw  cash,  for  rent  of  the  store  for  1  mo., 
January,  $30. 

S.  Bought  ofi&ce  supplies  as  per  bill  on  the  following  page : 

41 


42 


BOOKKEEPING 


if 

^&..JA.J^0?'9y  0^.....      ;o 

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c>/j^y?^  .^y^-^(2r.-^y 

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C^':^^^yy:.-^yi'-^Z>^ 

' 

Debit  Expense  for  the  above  bill. 

A  detailed  statement  of  goods  bought  or  sold  is  called  either  a  hill  or  an  invoice, 

A  detailed  statement  of  goods  bought  to  be  used  or  consumed,  or  a  statement  of 
services  rendered,  is  usually  called  a  hill. 

Thus,  a  physician's  statement  of  services  rendered,  and  the  charges  for  the  same, 
is  called  a  hill;  a  statement  of  a  quantity  of  silk  bought  or  sold  by  a  merchant  is 
called  either  a  hill  or  an  invoice. 


Jan.  4.  Bought  of  Allen  &  Parker  for  cash : 


50  T.  Grate  Coal 
40  T.  Stove  Coal 

5.  Sold  John  S.  Adams  for  cash : 

10  T.  Grate  Coal 

6.  Sold  A.  M.  Paterson  on  account : 

15  T.  Stove  Coal 

8.  Sold  John  S.  King  for  cash : 

5  T.  Grate  Coal 

9.  Sold  Charles  M.  Gray  on  account 

10  T.  Stove  Coal 


35  T.  Nut  Coal 
20  T.  Hay 

5  T.  Hay 
10  T.  Nut  Coal 

5  T.  Hay 
10  T.  Hay 


SET  I.   RETAIL  FUEL  AND  FEED  43 

Jan,  11,  Bought  of  Henry  A.  Stevens  on  account : 
15  T.  Stove  Coal  15  T.  Hay 

12,  Received  cash  as  shown  by  the  following  check : 


traders  Rational  ^ank 


"Pay  to  the  order  of    r>f.  //f..  AX^^.^t(^r77^ ,  f  / 1,^-^ 


A  Check  is  an  order  on  a  bank  by  a  depositor  for  the  payment  of  money. 
13,  Received  the  following  note  to  apply  on  account : 


^' .    "^       -<:Z^.,.--7^^.^-s^-^^!L^^t^^ ■ nfier  date^ZiLpromise  to  pay  to 

the  order  of  ' ' /^^  yy^.  '^^X^^t^  J^^?^^  ^ 


Ualue  receioed 


Ko.-lj2—  "Due   '/zj -dJ^^J^^^  1^.jJ^^^._ 


Y- 


^  15,  Gave  Henry  A.  Stevens  a  note  at  10  da.  to  apply  on  account,  $150 

16,  Bought  of  Johnson  &  Main  for  cash : 

5  T.  Nut  Coal 

17,  The  Proprietor  withdrew  cash  for  personal  use,  |50. 

18,  Gave  the  Monroe  Typewriter  Exchange  cash  for  the  following : 

1  Typewriter,  $50  1  Office  Desk,  f  25 

Debit  Expense  for  this  bill. 

19,  Received  of  A.  M.  Paterson  his  check  for  the  balance  of  the  in- 
voice sold  him  on  Jan.  6,  |62.50. 

W,  Received  of  Charles  M.  Gray  cash,  to  apply  on  account,  $75. 
W,  Sold  James  W.  Traver  on  account ; 

20  T.  Grate  Coal  12  T.  Nut  Coal 


44 


BOOKKEEPING 


Jan.  22.  Bought  of  Lane  &  Son  merchandise,  as  shown  by  the  fol- 
lowing invoice: 


Vo 


zd  /^^^^^^^^'-(^^It^. 


.^^^^  y^i'^^^^f^^^ 


."Dt 


2=IL 


1^2^      >/<? 


La. 


'^^'^^ 


jLl 


23.  Received   of  Charles  M.  Gray  cash  for  his  note  which  is  due 
to-day,  JllO. 

24.  Received  of  James  W.  Traver  his  check,  to  apply  on  account, 
*100. 

25.  Gave  Henry  A.  Stevens  cash  for  a  note  which  fell  due  to-day,  $150. 

26.  Sold  A.  M.  Paterson  on  account : 


5  T.  Hay 


5  T.  Grate  Coal 


27.  Gave  Henry  A.  Stevens  cash,  to  apply  on  account,  $50. 

29.  Gave  Lane  &  Son  a  note  at  10  da.,  to  apply  on  account,  $135. 

31.  Paid  Student  cash,  for  services  to  date,  $20. 

Pass  the  journal  sheet  to  the  instructor  for  correction  and  .criticism ; 
then  copy  carefully  into  the  bound  journal. 

Below  the  last  journal  entry  copy  the  following,  using  the  form  given 
on  page  6. 

Inventories,  January  31,  19 — 
Merchandise : 

20  T.  Grate  Coal  $6.10  $122. 

30  T.  Stove  Coal  6.25  187.50 

18  T.  Nut  Coal  6.20  111.60 

30  T.  Hay  10.50  315.         $736.10 


SET  I.    RETAIL  FUEL  AND  FEED  45 

The  student  should  verify  the  merchandise  inventory. 

Expense : 

Typewriter  $50 

Office  Desk  25 

Office  Supplies  _5  |80 

Posting.  Open  accounts  in  the  ledger,  three  on  each  page,  in  the 
following  order :  Proprietor,  Cash,  Expense,  Merchandise. 

After  posting,  foot  the  accounts  having  more  than  one  item,  in  pencil, 
making  very  small  figures.    Recheck  the  posting. 

Take  a  trial  balance  of  the  ledger,  omitting  all  accounts  that  balance ; 
record  it  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Make  a  Loss  and  Gain  Statement. 

Make  a  Resource  and  Liability  Statement. 

Make  a  proof  or  verification  of  statement. 

Record  the  statements  and  proof  in  Blank  No.  1,  on  the  page  indicated 
by  the  index. 

Closing  the  Ledger.  Open  a  Loss  and  Gain  account ;  close  the  Mer- 
chandise and  Expense  accounts  into  the  Loss  and  Gain  account ;  close 
the  Loss  and  Gain  account  into  the  Proprietor  s  account. 

Balance  the  Cash  account ;  take  a  trial  balance. 

Present  all  books  to  the  instructor  for  approval. 

EXERCISE  35 
A  Written  Review 

The  following  review  exercises  are  suggested. 

a.  Journalizing.  Journalize  orally  or  in  writing  each  of  the  following 
transactions,  and  state  the  reason  for  each  debit  and  each  credit  named. 

1.  You  began  business  with  the  following  investment:  cash,  $1500; 
merchandise,  |1200. 

When  several  resource  items  represent  the  proprietor's  investment,  each  item  is 
debited,  under  its  appropriate  name,  and  the  proprietor  is  credited  for  the  total  of 
the  resources. 

The  following  is  the  correct  entry  for  No.  1 : 

Cash  *1600 

Mdse.  1200 

Student  12700 

Note  the  explanation  of  this  entry  on  page  46. 


46  BOOKKEEPIlSrG 

This  is  a  compound  entry ;  it  may  consist  of  any  one  of  the  following : 
Several  debits  and  one  credit. 
One  debit  and  several  credits. 
Several  debits  and  several  credits. 

2.  Chas.  E.  Snyder  began  business  with  the  following  investment : 
cash,  $1000  ;  John  A.  Wilder's  note,  $950  ;  merchandise,  |1325. 

3.  Wm.  A.  Russell  began  business  with  the  following  resources: 
cash,  $560  ;  merchandise,  $1975 ;  H.  H.  Redding's  note,  $450  ;  coal  for 
use  in  store,  on  hand,  $35. 


The  following  is  the  correct  entry  for  No.  3 : 

Cash 

$560 

Mdse. 

1975 

Bills  Rec. 

450 

Expense 

35 

Wm.  A.  Russell 

$3020 

4.  W.  A.  Lincoln  began  business  with  the  following  resources :  cash, 
$1750 ;  account  against  Freeman  &  Co.,  $350 ;  merchandise,  $1275 ; 
John  G.  Reed's  note,  $500. 

5.  You  began  business  with  the  following  resources :  cash,  $1000 ; 
Geo.  O.  Overman's  note,  $400;  merchandise,  $1500;  account  against 
Prince  &  Lane,  $250. 

6.  Gave  Geo.  S.  Ware  your  note  at  60  da.,  to  apply  on  account,  $325. 

7.  Gave  H.  M.  Marshall  your  note  at  30  da.,  with  interest,  to  apply 
on  account,  $450. 

No  entry  is  made  for  the  interest  until  the  note  is  paid. 

8.  Received  of  R.  D.  Record  his  note  at  10  da.,  to  apply  on  account, 
$176. 

9.  Received  of  Lyman  &  Son  their  note  at  30  da.,  with  mterest,  to 
apply  on  account,  $275. 

10.  Received  of  Thomas  &  Co.  cash  for  their  note  and  interest ;  face 
of  the  note,  $320 ;  interest,  $16. 

The  above  is  journalized  as  follows : 

Cash  $336 

Bills  Rec.  $320 

Interest  16 

Interest  is  debited  when  it  costs  something;  it  is  credited  when  it 
produces  something. 

When  the  statement  is  made  that  we  pay  interest,  we  really  mean  that  we  pay 
cash  for  the  interest. 


EEVIEW  EXERCISES  47 

11.  Paid  your  note  and  interest  in  cash,  in  favor  of  W.  D.  Longman ; 
face  of  the  note,  |275 ;  interest,  |12. 

The  above  is  journalized  as  follows : 

Bills  Pay.  $275 

Interest  12 

Cash  $287 

12.  Received  of  W.  L.  Clark  cash,  for  his  note  due  to-day,  |187.50. 

13.  Received  of  Frank  Likly  cash  for  his  note  and  interest;  face  of 
the  note,  |245 ;  interest,  $11. 

14.  Paid  your  note  and  interest  in  favor  of  James  A.  Boyce,  in  cash ; 
face  of  the  note,  $160 ;  interest,  $7.50. 

15.  Paid  your  note  in  favor  of  Geo.  K.  Johnson,  in  cash,  $300. 

16.  Received  a  check  of  H.  A.  Preston  for  his  note,  $452.50. 

17.  Paid  your  note  in  favor  of  H.  D.  Bryan,  in  cash,  $275. 

18.  Received  a  check  from  A.  S.  Kemp  for  his  note  and  interest; 
face  of  the  note,  $150 ;  interest,  $6.25. 

19.  Paid  your  note  and  interest  in  favor  of  A.  R.  Sharp,  in  cash; 
face  of  the  note,  $200 ;  interest,  $9.50. 

20.  Gave  Robbins  &  Co.  your  note  at  60  da.,  with  interest,  to  apply 
on  account,  $500. 

b.  Statements.  Make  the  two  statements  and  the  verification  from  the 
following  trial  balances.    Observe  these  directions : 

The  bills  receivable  are  a  resource.    The  bills  payable  are  a  liability. 

Interest,  as  an  open  ledger  account,  is  always  a  loss  or  a  gain  item;  if  the 
balance  is  a  debit,  the  account  shows  a  loss ;  if  the  balance  is  a  credit,  the  account 
shows  a  gain. 

Date  each  statement  Feb.  28,  19 — . 

No.  1 


Student,  Prop. 

$5096. 

Cash 

$2443. 

Merchandise 

952.50 

200.50 

Expense 

100. 

Interest 

12.25 

8.50 

James  &  Co. 

397.50 

Bills  Receivable 

600.20 

Henry  S.  Willis 

1011. 

John  K.  Searle 

61.40 

A.  L.  Gracey 

101.35 

Bills  Payable 

172. 

W.W.Hays 

100.50 

$5578.35 

$5578.35 

Inventories  : 

Merchandise 

$794.50 

Expense 

76.50 

k 


48 


BOOKKEEPING 


No.  2 


Geo.  M.  Lee,  Prop. 
H.  K.  Paine,  Prop. 
Cash 
Merchandise 

11061.30 
2096.75 

11200. 
1200. 

1723.50 

Expense 

Wm.  H.  Lowney 
J.  I.  Percy 
Arden  &  Co. 

110.50 
125.30 
206.30 
215.15 

Jas.  P.  Hunter 

116.25 

Bills  Payable 
Interest 

15.85 

125. 
16.40 

Bills  Keceivable 

550. 

$4381.15 

14381.15 

Inventories  : 

Merchandise 

$578.45 

Expense 

67.20 

c.  Closing  the  Ledger.    On  a  loose  sheet  of  ledger  paper  copy  the 
following  accounts;  allow  ten  lines  for  each  account. 


Student,  Proprietor 


19— 

Jan. 


10 


2    125 


19— 

Jan. 


2550 


Merchandise 


19— 

19- 

■ 

Jan. 

5 

1 

516 

20 

Jan. 

10 

2 

412 

75 

12 

2 

78 

40 

17 

3 

310 

25 

24 

3 

285 

70 

Expense 


19— 

Jan. 


35 
25 


50 


REVIEW  EXERCISES 


49 


Inventories : 

Merchandise 
Expense 

Open  a  Loss  and  Gain  account ;  close  the  ledger. 


$275.20 
22.50 


II 


James  R.  Turner,  Proprietor 


19— 

Feb. 


75 


19— 

Feb. 


2650 


Merchandise 


19- 

— 

19— 

Feb. 

11 

2 

289 

50 

Feb. 

13 

2 

609 

20 

18 

3 

546 

70 

19 

3 

335 

23 

4 

715 

45 

25 

4 

255 

60 

27 

5 

100 

Expense 

19- 

Feb. 

1 
10 
26 

1 
2 
4 

50 
35 
21 

50 

Interest 


19— 

Feb. 


12 


12 


10 


19— 

Feb. 


19 


Inventories : 

Merchandise 
Expense 


$725.25 
72.50 


The  model  for  closing  the  Interest  account  is  on  page  54. 
Open  a  Loss  and  Gain  account ;  close  the  ledger. 


50  BOOKKEEPING 


REVIEW  QUESTIONS 

1.  What  is  a  business  transaction  ?  2.  In  how  many  ways  does  a  business  transac- 
tion affect  the  business  ?  3.  Define  merchandise.  4.  B,  a  dry-goods  merchant,  bought 
3  T.  coal  for  heating  his  store.  Should  this  purchase  be  recorded  under  merchandise  ? 
Why  ?  What  is  the  name  of  the  purchase  to  the  merchant  who  sold  it  ?  5.  Define  cash. 
6.  Define  expense.  7.  Who  is  a  debtor?  a  creditor?  8.  Define  debit;  credit.  9.  What 
is  an  account?  10.  Name  the  two  sides  of  an  account.  11.  What  are  personal  ac- 
counts ?  12.  Define  a  negotiable  promissory  note.  13.  What  is  meant  by  journaliz- 
ing? 14.  Define  bookkeeping.  15.  What  is  the  object  of  bookkeeping?  16.  Name 
the  two  methods  of  bookkeeping.  17.  What  is  the  purpose  of  the  journal  ?  18.  What 
is  posting  ?  19.  What  is  the  purpose  of  the  ledger  ?  20.  What  is  a  trial  balance  ? 
From  what  is  it  taken  ?  21.  What  facts  are  set  forth  in  the  trial  balance  ?  22.  What 
is  an  inventory,  and  how  is  it  found  ?  23.  When  is  merchandise  debited  ?  when  cred- 
ited ?  24.  When  is  expense  debited  ?  25.  When  are  personal  accounts  debited  ?  when 
credited?  26.  When  are  bills  receivable  debited?  when  credited?  27.  When  are 
bills  payable  debited?  when  credited?  28.  What  is  a  gain?  a  loss?  29.  What  are 
resources  or  assets?  liabilities?  30.  Define  net  gain;  net  loss.  31.  Define  capital; 
insolvency.  32.  Name  the  two  general  classes  of  accounts.  33.  Name  the  class 
to  which  each  of  the  following  accounts  belong:  cash;  merchandise;  personal 
accounts;  expense;  interest;  discount;  bills  receivable ;  bills  payable.  34.  On  which 
side  of  the  ledger  are  losses  found?  gains?  resources?  liabilities?  35.  What  is 
the  object  of  making  business  and  financial  statements  ?  36.  What  is  meant  by 
closing  an  account  ?  37.  When  are  resource  and  liability  accounts  closed  in  business  ? 
loss  and  gain  accounts  ?  38.  Explain  the  process  of  closing  a  loss  and  gain  account. 
39.  The  accounts  showing  loss  and  gain  are  closed  into  what  account  ?  40.  The  loss 
and  gain  account  is  closed  into  what  account?  41.  How  is  the  proprietor's  account 
closed  when  there  is  a  net  gain  ?  when  there  is  a  net  loss  ?  42.  Which  side  of  the 
cash  account  must  always  be  the  larger  when  there  is  any  difference  ?  of  the  bills 
receivable  account?  of  the  bills  payable  account?  43.  What  is  an  entry?  44.  What 
is  the  difference  between  interest  and  discount  ?  45.  When  is  interest  or  discount 
debited?  when  credited?  46.  When  does  a  personal  account  show  a  resource?  a 
liability  ? 


SET  II.   WHOLESALE  CARPET  BUSINESS 

This  set  is  separate  from  Set  I,  but  the  character  of  the  work  is  similar. 

The  books  used  are  the  same  as  in  Set  I. 

Directions  and  Suggestions.    Observe  the  following  directions : 

1.  First  journalize  on  a  loose  sheet  of  journal  paper. 

2.  James  R.  Denison  is  represented  as  the  proprietor. 

Selling  Price  List  for  February 


Axminster 
$2.50 

Brussels 
$1.35 

Ingrain 

75^ 

Linoleum 
60^ 

Oilcloth 
30^ 

Wilton 
$2.65 

Memoranda  of  Transactions  for  February 

Feb.  1.  James  R.  Denison,  Boston,  Mass.,  began  the  Wholesale  Carpet 
business  with  the  following  resources:  cash,  $500;  merchandise,  $2595.50; 
fixtures,  $200 ;  coal,  for  heating  the  store,  $15 ;  the  note  on  page  62. 

The  following  is  the  opening  journal  entry  for  this  set : 


^^^ 

-t^^U-^iA^^^z^ /,  /f- 

- 

(^z^^^-z-^K^  7P^o^U<?^^ 

<^^^^»^><-i^^^^z<?^><.'^^l^ 

^^e^^^^-c^^*?^*^  ~^fZ^ 

L.^<^ /C2^^fd<^ltA?^..<i-c£eS^ 

...-'U/'t^^^^^^.'^^in^e^.'-^^ 

t^<»^^^<^£^^^^^^^:^<^.* 

'-^.^e^^<i.Ay 

iyT-z^^-^Loyyz^f 

S<P0 

— 

%„u^ 

^dl^^^i-^i^-c^ 

>2Jr^cr 

^0 

0yi^::^h.■^■-y^^<d^^ 

yJ^Ui^tZcyL^^ZiPt?^.  ■^'z^^^ 

Z/^ 

- 

^Q^/l^-^.. 

b. /6y22<ii^fct«'^x:?^^«^€^ 

J(PO 

— 

Qitjr^Mly>z^c<^'ir>ty 

'^^/t^^^iPU^.A.^.J-iP-Uyt^C.e^ 

j6/o 

<^<p 

2,  Paid  Lee  &  Crane  cash  for  the  following  expense  items :  stationery, 
$4.50 ;  office  books,  $3.50. 

S.  Paid  George  R.  Daniels  cash,  for  rent  of  the  store  for  1  mo.,  Feb- 
ruary, $75. 

4.  Bought  of  W.  B.  Mason  &  Co.,  Philadelphia,  on  account,  invoice 
of  carpets  amounting  to  $572.50. 

5.  Bought  of  A.  R.  Prescott  &  Co.,  New  York,  on  account,  invoice 
of  carpets  amounting  to  $612.95. 

51 


52  BOOKKEEPING 


— V-C^'^^^.^r^^-?^ afltr  Jatel:t^promke  to  pay  to 

the  order  nf  y^..^>^^^.d^/\^^ /^  ■    ■— 

*Oalue  received 


Feb,  6.  Sold  W.  F.  Pratt,  Springfield,  on  account : 

200  yd.  Brussels  150  yd.  Ingrain 

100  yd.  Axminster 

6.  Sold  Jas.  R.  Holcomb,  City,  for  cash : 

100  yd.  Oilcloth  40  yd.  Axminster 

9,  Sold  John  W.  King,  City,  on  account : 

40  yd.  Oilcloth  16  yd.  Linoleum 

60  yd.  Brussels 

9,  Sold  M.  F.  Newbury,  Providence,  on  account : 

100  yd.  Wilton  120  yd.  Axminster 

10.  Remitted  A.  R.  Prescott  &  Co.  a  note  at  10  da.,  with  interest 
at  6%,  in  full  for  the  mvoice  of  Feb.  5. 

11.  Received  of  Ernest  B.  Jackson  cash  for  his  note  and  interest  due 
to-day ;  face  of  note,  $300  ;  interest,  50<^ ;  total,  |300.50. 

12.  Received  of  W.  F.  Pratt  his  note  at  10  da.,  with  interest  at  6%, 
$250,  and  the  balance  of  the  invoice  of  Feb.  6  in  cash. 

13.  Sold  Geo.  S.  Rollins,  City,  for  cash : 

100  yd.  Brussels  100  yd.  Linoleum 

15.  Bought  of  A.  R.  Prescott  &  Co.,  New  York,  on  account,  invoice 
of  carpets  amounting  to  $172.50. 

16.  Sold  W.  F.  Pratt,  Springfield,  on  account : 

40  yd.  Ingrain  ^5  yd.  Brussels 

100  yd.  Axminster 

16.  The  Proprietor  appropriated  for  his  own  use : 

1  Rug  14'  X  18',  $40  1  Rug  16'  x  20',  $85 

20.  The  First  National  Bank  presented  for  payment  the  note  in  favor 
of  A.  R.  Prescott  &  Co.,  due  to-day.  Paid  the  note  and  interest  in 
cash;  face  of  the  note,  $612.95;  interest,  $1.02;  total,  $613.97. 


SET  11.   WHOLESALE  CARPET  53 

Feb,  W.  Sold  John  A.  Newton,  City,  for  cash : 

70  yd.  Wilton 

22.  Received  of  W.  F.  Pratt  cash  for  his  note  and  interest  due  to-day ; 
face  of  the  note,  $250  ;  interest,  42(^ ;  total,  1250.42. 

22.  Bought  of  C.  W.  Allen  &  Co.,  City,  for  cash,  an  invoice  of  carpets 
amounting  to  $410.50. 

23.  Received  the  following  check,  to  apply  on  account : 


traders  3^ational  ^ank 

^ay  to  the  order  of     i^^7^i-7^^^..<i^ /i':'^ 2?^ j>  t^'^ 


■  ■  t^- 

^y!^1^^r^y  Ahf^.-?^^y?^^    ''//O^ • "Polk 


Under  what  name  is  this  check  entered  ? 

As  checks  are  used  so  commonly  in  business,  a  careful  study  of  this  form  is 
commended. 

25.  Sold  John  W.  King,  City,  the  following  (received  cash,  $65 ; 
balance  on  account) : 

50  yd.  Ingrain  40  yd.  Axminster 

Make  the  following  entry  for  this  sale :  Debit  King  and  credit  Mdse.  for  the 
whole  bill;  then  debit  Cash  and  credit  King  for  the  money  received.  Date  each 
entry  Feb.  25. 

26.  Received  of  John  W.  King  his  note  at  30  da.,  with  interest  at  6%, 
for  the  amount  of  the  invoice  of  Feb.  9. 

26.  Remitted  W.  B.  Mason  &  Co.  a  note  at  30  da.,  with  interest  at  6%, 
in  full  for  the  invoice  of  Feb.  4. 

27,  Sold  Lewis  &  Parsons,  City,  for  cash : 

200  yd.  Ingrain  50  yd.  Linoleum 

100  yd.  Oilcloth 

27.  V2i\di  Student  for  services  to  date,  $40;  paid  A.  M.  Olcott  for 
services  to  date,  $30. 

Pass  the  journal  sheet  to  the  instructor  for  approval ;  then  copy  into 
the  regular  journal,  beginning  on  the  page  indicated  by  the  index  for 
Set  II,  in  Blank  No.  1. 


64  BOOKKEEPING 

Below  the  last  journal  entry  copy  the  following : 

IXVENTORIES,  FEBRUARY  28,  19 

Merchandise : 

Per  schedule  prepared  by  Denison  $2214.92 

Expense : 

Fixtures  on  hand  |195. 

Posting.  Open  accounts  in  your  ledger,  three  on  each  page,  in  the 
same  order  as  in  Set  I,  beginning  on  the  first  full  blank  page. 

Foot  the  accounts  in  pencil ;  recheck  the  posting. 

Take  a  trial  balance,  omitting  all  accounts  that  balance  ;  after  approval, 
record  it  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Make  the  usual  statements,  and  the  verification  ;  after  approval,  record 
them  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Closing  the  Ledger.  Open  a  Loss  and  Gain  account ;  close  the  follow- 
ing accounts  into  it :  Merchandise,  Expense,  Interest. 

The  model  for  closing  the  Interest  account  is  given  on  this  page. 

Close  the  Loss  and  Gain  account  into  the  Proprietor's  account. 

Close  the  Cash  account  by  balance. 

Take  a  trial  balance. 

Present  all  books  to  the  instructor  for  approval. 

Model  for  closing  Interest 


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EXERCISE  36 

A  Written  Review 

The  following  review  exercises  are  suggested : 

a.  Statements.   Make  the  two  statements  and  the  verification  from  the 
following  trial  balances. 

Date  each  statement  March  31,  19 — . 


REVIEW  EXERCISES 


55 


No.  1 


Student^  Prop. 

$100. 

$2450. 

Expense 

120. 

Cash 

1876.25 

1214.50 

Merchandise 

3354.75 

1827.40 

Chas.  J.  Hardy 

365. 

Interest 

8.35 

13.75 

Frederic  &  Co. 

286.50 

Martin  &  Son 

235.20 

Geo.  L.  Grace 

67.40 

Bills  Payable 

325. 

Bills  Receivable 

125. 

$6184.55 

$6184.55 

Inventories : 

Merchandise 

$1926.50 

Expense 

77.50 

No.  2 

George  S.  Mitchell 

,  Prop.                  $100. 

$3400. 

Expense 

155. 

Merchandise 

3875.50 

2300.60 

Cash 

2364.35 

John  F.  Henry 

308.20 

Maurice  &  Co. 

215.50 

James  F.  Hawkins 

127.75 

Wm.  H.  Reeder 

87.90 

Interest 

15.65 

11. 

Bills  Payable 

611.45 

H.  H.  Wyatt 

320. 

$6946.45 

$6946.45 

Inventories : 

Merchandise 

$1729.55 

• 

Expense 

102.50 

b.  Closing  the  Ledger.     On  a  loose  sheet  of  ledger  paper  copy  the 
following  accounts ;  allow  ten  lines  for  each  account. 


Student,  Proprietor 


19— 

Mar. 


11 


150 


19- 

Mar. 


2650 


56 


BOOKKEEPING 
Merchandise 


19— 

19— 

— 

Mar. 

3 

1 

352 

55 

Mar. 

8 

1 

560 

25 

12 

2 

250 

50 

15 

2 

337 

50 

19 

3 

425 

23 

4 

211 

20 

27 

5 

516 

Expense 

19— 

Mar. 

2 
11 
30 

2 
3 
5 

42 
35 

18 

Interest 

19— 

19- 

Mar. 

13 

5 

5 

60 

Mar. 

18 

6 

7 

80 

20 

6 

8 

20 

23 

6 

4 

10 

Inventories : 

Merchandise 
Expense 

Open  a  Loss  and  Gain  account ;  close  the  ledger. 

II 

James  S.  Cone,  Proprietor 


1625.75 
45. 


19— 

Apr. 


75 


19— 

Apr. 


3250 


Merchandise 


19— 

— 

19— 

^ 

— 

Apr. 

3 

1 

1256 

20 

Apr. 

8 

1 

986 

40 

10 

2 

835 

70 

12 

3 

632 

70 

16 

2 

255 

75 

19 

3 

587 

50 

25 

4 

490 

50 

REVIEW  EXERCISES 
Expense 


57 


19- 

— 

Apr. 

4 
10 
29 

1 
3 
4 

75 
15 
10 

50 
25 
40 

Interest 


19- 

19- 

Apr. 

11 

5 

11 

75 

Apr. 

17 

4 

9 

90 

14 

6 

5 

25 

24 

5 

15 

25 

22 

7 

3 

40 

- 

Inventories : 

Merchandise  J1070.80 

Expense  62.50 

Open  a  Loss  and  Gain  account ;  close  the  ledger. 
c.  Journalizing.    Journalize  orally  or  in  writing  each  of  the  following 
transactions  and  state  the  reason  for  each  debit  and  each  credit  named. 

1.  You  began  business  by  investing  cash,  |1250;  merchandise,  $800; 
real  estate,  $1750. 

Real  Estate  includes  all  land,  and  whatever  legally  belongs  to  the  land. 

2.  James  R.  Durham  began  business  with  the  following  resources: 
merchandise,  $975;  cash,  $850;  account  against  George  H.  Sand,  $250; 
Jas.  L.  Perrin's  note,  $550 ;  real  estate,  $750. 

3.  Thos.  Hardy  gave  you  his  note  at  60  da.,  with  interest,  to  apply 
on  account,  $400. 

4.  You  gave  A.  H.  Wheeler  your  note  at  30  da.,  with  interest,  to 
apply  on  account,  $300. 

5.  Bought  merchandise  of  Lane  &  Gross  amounting  to  $650.  Gave 
them  cash  for  one  half  the  invoice ;  balance  on  account. 

6.  Sold  James  R.  Mann  merchandise  amounting  to  $750.  Received 
his  check  for  one  haK  the  invoice ;  balance  on  account. 

6.  Paid  your  note  in  favor  of  Harry  F.  Meekins,  in  cash,  $350. 

8.  Received  a  check  from  Thomas  Harlan  for  his  note  due  to-day,  $100. 

9.  You  gave  Lamed  &  Co.  cash  for  your  note  and  interest  due 
to-day;  face  of  the  note,  $235;  interest,  $10.50. 

10.  Received  a  check  from  J.  A.  Markham  for  his  note  and  interest 
due  to-day ;  face  of  the  note,  $425 ;  interest,  $21. 


58  BOOKKEEPING 

11.  You  withdrew  from  the  business  for  personal  use  cash,  |100. 

12.  Borrowed  of  T.  K.  Jones  cash,  |150,  and  gave  him  your  note 
at  30  da. 

13.  Loaned  A.  H.  Decker  cash,  $200,  and  received  his  note  at  60  da. 


LABOR-SAVING  DEVICES:    DIFFERENT  BOOKS  USED 

It  has  been  seen  that  all  the  transactions  of  a  business  may  be  recorded 
in  a  book  called  the  journal.  In  business  it  is  more  convenient,  simple, 
and  effective  to  classify  transactions  as  they  occur ;  this  is  accomplished 
by  using  the  following  books : 

The  Cashbook  contains  a  record  of  all  receipts  and  all  disbursements  of 
cash.  It  is  the  cash  account  of  the  business,  and  when  it  is  used  no 
account  with  cash  need  be  kept  in  the  ledger.  The  left-hand  page  con- 
tains a  record  of  all  the  cash  debits  (receipts),  together  with  the  names 
of  the  accounts  to  be  credited,  and  a  brief  explanatory  statement.  The 
right-hand  page  contains  a  record  of  all  the  cash  credits  (payments),  to- 
gether with  the  names  of  the  accounts  to  be  debited,  and  a  brief  explana- 
tory statement.  The  difference  between  the  two  sides  of  the  cashbook 
should  show  the  amount,  balance,  of  cash  on  hand. 

The  Sales  Book  contains  a  record  of  all  sales  on  account,  and  usually 
of  all  cash  sales,  except  small  retail  sales  for  which  no  bills  are  rendered. 
The  records  consist  of  the  names  and  the  addresses  of  the  purchasers, 
the  terms,  the  items,  the  prices,  and  the  amounts  of  the  goods  sold.  At 
regular  intervals  the  book  is  footed  and  closed. 

The  Purchase  Book  contains,  usually,  an  abstract  of  all  bills  of  merchan- 
dise bought.    At  regular  intervals  the  book  is  footed  and  closed. 

When  the  cashhook,  the  sales  hook,  and  the  purchase  hook  are  used,  only 
such  transactions  as  do  not  affect  these  books  are  entered  in  the  journal. 

As  a  preliminary  drill  it  will  be  found  helpful  to  journalize  on  the  blackboard 
each  cash  transaction  and  beside  it  make  the  cashbook  entry.  The  same  plan  may 
be  followed  for  both  purchases  and  sales. 

EXERCISE  37 

SET  E  (MODEL  SET).   FLOUR  AND  GRAIN 

On  pages  63  to  67  is  a  complete  model  set,  in  script,  in  which  the 
journal,  the  cashbook,  the  sales  book,  the  purchase  book,  and  the  ledger 
have  been  used.  This  set  was  written  from  the  following  memoranda  of 
transactions,  but  different  prices  were  used  in  some  instances. 


CLASSIFICATION  OF  TRANSACTIONS  59 

Directions  and  Suggestions.  Write  the  set  from  the  memoranda  of 
transactions  following ;  be  guided  by  frequent  reference  to  the  model 
script  set. 

1.  Use  a  double  sheet  of  journal  paper,  four  pages,  and  a  sheet  of  ledger 
paper,  two  pages. 

2.  On  the  upper  half  of  page  1  of  the  journal  sheet  write  the  journal^ 
and  on  the  lower  half  the  purchase  hook;  on  pages  2  and  3,  the  cash- 
hook;  on  page  4,  the  sales  hook.  On  the  portion  of  pages  2  and  3,  below 
the  cashbook,  write  the  trial  balance,  the  statements  and  the  verification. 

3.  This  set  is  not  to  be  recorded  in  the  bound  books. 

4.  The  entries  will  be  the  same  as  in  the  script  model,  but  the  amounts 
will  differ  in  some  transactions. 

5.  A.  B.  Coates  is  represented  as  the  proprietor. 

Memoranda  of  Transactions 

March  1.  A.  B.  Coates,  Chicago,  111.,  began  the  Grain  and  Produce 
business,  investing  cash,  $1500. 

Make  a  memorandum  in  the  journal ;  enter  the  cash  received  by  the  business  in 
the  cashhook. 

1.  Paid  G.  H.  Irving  cash  for  rent  of  the  store  for  1  mo.,  $65. 

1.  Paid  E.  M.  Snow  cash  for  stationery,  $6. 

2.  Bought  of  F.  E.  Rogers  &  Co.,  Peoria,  on  account,  30  da. : 

500  bbl.  Flour  at  $4 

3.  Bought  of  L.  O.  White  &  Co.,  City,  for  cash: 

750  bu.  Wheat  at  61(^ 

Enter  in  the  purchase  hook,  placing  a  check  mark  (  V  )  in  the  folio  (page)  column 
against  the  name  of  the  firm ;  enter  the  cash  paid  on  the  right  side  of  the  cashbook 
and  place  a  check  mark  in  the  folio  column  against  the  name  of  the  firm.  Neither 
entry  need  be  posted. 

If  the  ledger  is  designed  to  show  just  how  much  business  is  done  with  each  firm 
of  whom  we  buy  or  to  whom  we  sell,  then  the  items  should  not  be  checked,  but  post- 
ings should  be  made  from  both  the  purchase  book  and  the  cashbook. 

When  the  check  mark  is  used,  as  above,  it  means  do  not  post. 

Until  otherwise  instructed,  all  purchases  for  cash  will  be  entered  in  the  purchase 
book  and  the  cashbook,  and  checked ;  all  sales  for  cash  will  be  entered  in  the  sales 
book  and  the  cashbook,  and  checked ;  neither  will  be  posted  to  the  ledger. 

5.  Sold  D.  E.  French,  Joliet,  on  account,  20  da. : 

300  bbl.  Flour  at  |4.75  150  bu.  Wheat  at  89^ 


60  BOOKKEEPING 

March  9:  Bought  of  F.  E.  Rogers  &  Co.,  Peoria,  on  account,  30  da.: 
1000  bu.  Oats  at  39^ 

10,  Sold  P.  Q.  Reed,  City,  on  account,  20  da. : 

200  bu.  Wheat  at  89^ 

11.  Sold  J.  K.  Loveless,  City,  for  cash  less  2%  : 

100  bbl.  Flour  at  $4.85  200  bu.  Oats  at  50(^ 

Enter  in  the  sales  book  and  check ;  then  enter  in  the  cashbook  and  check. 
Unless  otherwise  instructed,  all  cash  purchases  and  all  cash  sales  will  be  entered 
as  already  described. 

15,  Sold  D.  E.  French,  Joliet,  on  account,  20  da. : 

500  bu.  Oats  at  55^  200  bu.  Wheat  at  89^ 

20,  Sold  C.  A.  Wesp,  City,  for  cash  less  2%  : 

100  bbl.  Flour  at  $4.95  300  bu.  Oats  at  53<^ 

28,  Bought  of  M.  N.  Olson,  City,  on  account,  3  da. : 
1500  bu.  Wheat  at  63<^ 

25.  Received  of  D.  E.  French  his  check  in  full  for  the  invoice  of 
March  5,  11558.50. 

A  check  is  regarded  as  cash;  record  the  amount  on  the  left  side  of  the  cashbook. 

26.  Gave  M.  N.  Olson  cash  in  full  for  the  invoice  of  March  23. 

27.  Remitted  F.  E.  Rogers  &  Co.,  a  note  at  10  da.,  with  interest  in 
full  for  the  invoice  of  March  2. 

50.  Received  cash  of  P.  Q.  Reed  in  full  for  the  invoice  of  March  10. 

51.  Paid  the  bookkeeper,  H.  C.  Ray,  his  monthly  salary  in  cash,  |40. 
Balance  the  cashbook ;  follow  the  model  script  form. 

Make  the  closing  entry  in  the  purchase  book. 
Make  the  closing  entry  in  the  sales  book. 

Post  all  the  books  to  the  ledger;  allow  ten  lines  for  each  account, 
as  follows : 

1.  Post  the  journal  in  the  usual  way,  writing  J  in  the  explanation 
column  of  the  ledger  to  indicate  the  book  from  which  it  was  posted. 

2.  Post  the  cashbook.  The  amounts  on  the  debit  (left)  side  should 
be  posted  to  the  credit  of  the  ledger  accounts  named.  The  amounts  on 
the  credit  (right)  side  should  be  posted  to  the  debit  of  the  ledger 
accounts  named.  Write  Q  in  the  explanation  column  of  the  ledger. 
Write  the  page  of  the  ledger  in  the  folio  column  of  the  cashbook. 
Checked  items  must  not  be  posted. 


CLASSIFICATION  OF  TRANSACTIONS  61 

3.  Post  the  sales  book.  Debit  each  personal  account  that  is  not  al- 
ready checked,  and  credit  merchandise  for  the  total  sales,  the  footing. 
Write  S  for  sales  book  in  the  explanation  column  of  the  ledger.  Write 
the  ledger  page  iji  the  folio  column  of  the  sales  book. 

4.  Post  the  purchase  book.  Credit  each  personal  account  that  is  not 
already  checked,,  and  debit  merchandise  for  the  total  purchases,  the  foot- 
ing. Write  P  for  purchase  book  in  the  explanation  column  of  the  ledger. 
Write  the  ledger  page  in  the  folio  column  of  the  purchase  book. 

Recheck  the  posting ;  foot  the  ledger  accounts. 
Take  a  trial  balance. 

Remember  that  the  balance  of  the  cash  in  the  cashbook  must  be  carried  to  the 
trial  balance,  on  the  debit  side. 

Have  the  trial  balance  approved. 
Pass  all  work  to  the  instructor. 

Note.   If  an  additional  exercise  is  required,  use  Exercise  22,  Set  C. 

"^'^  EXERCISE  38 

SET  F.  COAL  AND  WOOD 

Directions  and  Suggestions.  This  set  is  designed  to  give  further  drill 
in  the  use  of  the  cashbook,  the  sales  book,  the  purchase  book,  the  journal, 
and  the  ledger. 

1.  Use  loose  sheets  of  journal  paper  and  ledger  paper. 

2.  This  set  is  not  to  be  recorded  in  the  bound  books. 

3.  Follow  the  directions  given  in  the  model  script  set. 

4.  Student  is  represented  as  the  proprietor. 

Memoranda  of  Transactions 

April  1.  Begin  a  Coal  and  Wood  business,  investing  cash,  |1750. 

2.  Rent  a  coal  and  wood  depot  of  C.  M.  Estes,  17  Warren  Street; 
give  him  a  check  for  one  month's  rent,  |75. 

3.  Buy  of  M.  L.  Travers  for  cash : 

2  Work  Horses,  $130  each  1  Delivery  Wagon,  {100 

1  set  Double  Harness,  |35  1  Osgood  Scales,  |200 

Debit  Expense  for  the  above  items. 

4.  Buy  of  C.  F.  Osbom  &  Co.,  City,  on  account,  10  da. : 
100  T.  Egg  Coal  at  $6  100  T.  Grate  Coal  at  |6.10 


62  BOOKKEEPING 

April  6.  Buy  of  Stevens  &  Co.,  Pittsburgh,  on  account,  10  da.: 

100  T.  Stove  Coal  at  $6.25  100  T.  Nut  Coal  at  |6.20 

100  T.  West  Virginia  Coke  at  $5 

8.  Buy  of  C.  L.  Smith,  City,  for  cash : 

10  cd.  Maple  Wood  at  $3.50  10  cd.  Pine  Wood  at  $4.50 

10  cd.  Body  Hickory  Wood  at  $5.50  * 

9.  Sell  George  H.  Marshall,  Homeville,  on  account : 

50  T.  Stove  Coal  at  $7.50  50  T.  Grate  Coal  at  $7.25 

11.  Sell  Gaylord  &  Son,  City  Point,  on  account : 

50  T.  West  Virginia  Coke  at  $6        50  T.  Nut  Coal  at  $7.50 

12.  Sell  G.  A.  Collier,  City,  for  cash  less  2%: 

50  T.  Stove  Coal  at  $7.50  10  cd.  Maple  Wood  at  $4.50 

10  cd.  Body  Hickory  Wood  at  $6.50 

15.  Pay  C.  F.  Osborn  &  Co.  cash,  to  apply  on  account,  $500. 

16.  Receive  of  Gaylord  &  Son  cash,  to  apply  on  account,  $250. 

17.  Give  Stevens  &  Co.  a  note  at  30  da.  with  interest,  to  apply  on 
account,  $1000. 

18.  Withdraw  cash  for  personal  use,  $100. 

20.  Receive  of  Gaylord  &  Son  their  check  to  balance  account,  $425. 
25.  Receive  of  George  H.  Marshall  cash,  to  apply  on  account,  $350. 
27.  Sell  G.  A.  Collier,  City,  for  cash  less  2%: 

10  cd.  Pine  Wood  at  $5.50  50  T.  Grate  Coal  at  $7.25 

29.  Pay  Mary  L.  Pierce,  the  bookkeeper,  her  monthly  salary  in  cash, 
$30 ;  pay  James  Torrey,  the  teamster,  his  monthly  salary,  $30 ;  E.  L. 
Higgins  for  care  of  the  horses,  $16.50. 

Debit  Expense  for  the  above  items. 

30.  Make  an  additional  investment  in  cash,  $750. 

Inventories,  April  30,  19 — 
Merchandise : 

50  T.  Nut  Coal  at  $6.50 
100  T.  Egg  Coal  at  $6 
50  T.  West  Virginia  Coke  at  $4.75 

Expense : 

Horses,  Wagons,  and  Harness  at  1%  below  cost,  $391.05 
Osgood  Scales  at  1%  below  cost,  $198 


MODEL  SCRIPT  SET 
Set  £.   Journal 


68 


/<^(p(? 


^7 


2-0  (P  (y 


2.(P  c?  (? 


Set  E.   Purchase  Book 


<3  o  ^g^-^^- 


-i&l5^-2-*^Z-/ 


l/ 


3  0  .^siC^zy. 


XJ 


3/ 


Z<?  o  0 


^^y 


J  f  (? 


/J- 


J-^ 


3  ydZ 


^o 


^£. 


64 


BOOKKEEPING 
Set  £ 


// 

ZJ 
30 

/ 

/ 
/ 

/7^ 

A^^^3 

7^ 

^¥¥3 

;^^ 

^^^^/ 

^f  ^^ 

^^ 

Set  E 


/^.^^A.^i>Ay^,  /f- 


Jlt^i^^U^ 


3oa. 

/a 


'^7 


4^— 


^^^i-^dyz.  ^ 


/¥Z<S 
/  33 


cT^ 


/J-^f 


/  y  AC 


<ryS  Z(i 


¥¥f 


Zy^^ 


^ip 


zA. 


MODEL  SCRIPT  SET 
Cashbook 


65 


^« 


/ 

J 

3/ 
c?/ 


a%^i^:^t^  t^^....^^/^^ 


■<d^i(i^-t^-<-'^Uyf^,  y^O'^. 


^  /S 


J-(P 


/a  ^3 


A^^^/3 


ZjL. 


2^ 


This  line  to  be  written  in  red  ink. 


Sales  Book 


y/^^-^^iy^t-cJzy /S,  /<f — 


^ 


Kj^tri^uy-gzyL^ 


2-0 


3/ 


< 


%c^^uy. 


iC^^ 


aAy.3 


S^:^ny^€yL^  i^-^ir/ 


/Z 


Wf- 


/// 

3^f 


3  f^  (? 


7^ 


Zy^s-C 


<^3^ 


33'^2- 


/^a  (P 
X0  a  c? 


3  f£^(^ 


7^ 


c?z 


Z£- 


66 


BOOKKEEPING 


Set  E.   Ledger 


< 


-^,  (o,  7^-^.^-^^/^'^^ 


/^(PC? 


^ 


2J. 


^'^^^ 


(ad^ 


^ 
^ 


Z0  o  o 


JfCP 


!i 


/^Zyiy.2.y 


2iPC^(P 


^^^ 


/.f^rdio 


A^^^   - 


^ 


'^^1^ 


/.■r.rr.fc' 


:^3^/£ 


^. 


2  II     /  74^  —  III  //?£i^^.  f^l  ~^, 


1 /  y^  - 


% 


/ 

/ 

3/ 


-^ 


INTRODUCTION  TO  BUSINESS  PRACTICE 


67 


\9/.QM-^ 


y^a^.Xii 


^/^  - 


^ 


'^^2d. 


^ 


^^LI^ 


W^ 


3/ 


-/? 


3y(^zscp 


^foAy. 


3/ 


33  f. 


7^ 


Close  all  the  books. 

Post  to  the  ledger ;  allow  ten  lines  for  each  account. 
Take  a  trial  balance.    Make  the  statements  and  the  verification. 
Close  the  ledger ;  take  a  trial  balance, 
all  work  to  the  instructor. 


INTRODUCTION  TO  BUSINESS  PRACTICE 
THE  BANK  ACCOUNT 

A  Bank,  primarily,  is  an  institution  chartered  by  the  state  or  the 
national  government,  to  deal  in  credits  and  to  provide  for  the  safe- 
keeping of  money. 

A  Commercial  Bank  renders  important  and  diversified  services  to  busi- 
ness men,  among  which  are  the  following : 

1.  It  grants  credit  to  business  men  who  wish  to  borrow  money. 

2.  It  is  a  safe  place  to  keep  money,  securities,  and  valuables. 

3.  It  facilitates  the  payment  of  money  by  allowing  deposits  to  be 
drawn  out  on  an  order  called  a  check.  It  does  away  with  the  necessity 
of  sending  money  from  one  place  to  another. 

4.  It  is  especially  helpful  to  business  men  in  making  collections,  such 
as  notes,  checks,  and  drafts. 

A  person  opens  an  account  with  a  commercial  bank  by  being  identified 
if  he  is  not  known  to  the  bank.  After  identification  he  writes  his  name 
in  a  signature  hook  or  on  a  signature  card.  He  then  makes  out  a  deposit 
ticket  for  all  items  deposited,  as  cash,  checks,  etc.  The  bank  furnishes 
deposit  tickets  and  a  check  book,  a  book  of  blank  checks  and  stubs, 
without  charge. 


68  BOOKKEEPING 

The  Signature  Card  gives  such  information  as  the  bank  may  require  concerning 
the  depositor,  but  the  most  important  is  the  depositor's  signature.  Any  paper  pre- 
sented at  the  bank  bearing  the  depositor's  name  admits  of  identification  by  reference 
to  the  signature  card. 

A  plain,  neat  signature  is  most  difficult  to  imitate.  One  should  always  write  his 
name  in  exactly  the  same  form. 

The  following  shows  a  signature  card  properly  filled  out : 


AUTHORIZED  SIGNATURE  OF 


For  the  HAMPDEN  NATIONAL  BANK  of  Westfield,  Mass. 


Address 

Business    /'/^-^^'7.^tA2^y / / O-^'^^l^- 


Date  -J^5'^^-Z.^^^'^^/4^I3— 


Deposit  tickets  are  not  uniform  in  arrangement.  The  following  illus- 
tration shows  how  the  items  of  a  deposit  may  be  classified  for  the  con- 
venience of  the  bank  which  receives  them.  The  stars  show  the  totals. 
The  whole  deposit  is  summarized  at  the  bottom  of  the  ticket. 

These  tickets  are  commonly  made  up  on  an  adding  machine ;  a  dupli- 
cate copy  may  be  made  for  the  file  of  the  depositor.  The  file  of  these 
duplicates  is  valuable  for  reference. 

The  deposit  ticket  and  the  items  for  deposit  should  be  handed  to  the 
receiving  teller.,  the  official  who  generally  receives  all  money  and  all  de- 
posits passed  to  the  bank.  He  examines  the  deposit,  and  if  everything  is 
found  to  be  correct,  he  enters  it  in  a  book  called  a  Pass  Book. 

The  pass  book  is  returned  to  the  depositor  by  the  teller  and  serves 
as  a  receipt  for  the  money  deposited  in  the  bank ;  it  should  always 
accompany  a  deposit.  Under  no  circumstances  should  the  depositor 
make  an  entry  in  his  pass  book. 


INTRODUCTION  TO  BUSINESS  PRACTICE 


69 


DEPOSITED  WITH 

CONTINENTAL  NATIONAL  BANK 
OF  CHICAGO 

FOR  ACCOUNT  OF 

HORACE  A.    WELLMAN 


September  19,         mi 


CHECKS  ON  OTHER 
CHICAGO  BANKS 

CHECKS  ON 
THIS  BANK 

CHECKS  AND  DRAFTS  ON  OTHER 
TOWNS  AND  CITIES 

Dollars 

Cents 

Dollars 

Cents 

Dollars 

Cents 

25 

46 

103 

174 

32 
28 
00 
60 

* 

16 
8 

24 

20 
14 

34 

# 

7 
11 
36 

54 

18 
02 
24 
44 

TOTAL  CHICAGO 

TOTAL  ON  THIS   BANK 

OUTSIDE 

174 

60 

24 

34 

54 

44 

CURRENCY 

SILVER 

GOLD 

160 

00 

30 

70 

GRAND  TOTAL 
LESS   EXCHANGE 

444 

08 
30 

443 

78 

70 


BOOKKEEPING 


Herewith  is  given  another  form  of  a  deposit  ticket  and  a  method  of 
keeping  a  duplicate  of  it.  On  the  ticket,  in  addition  to  the  currency 
items,  each  check  is  hsted  by  giving  the  name  of  the  city  on  which  it 

is  drawn,  for  the  convenience 


Reverse  Stub  of  the  Check  Book 


o^-^te.^2-t?-cl^t-^  : 


^a 


J~J- 


of  the  bank  which  receives 
the  deposit. 

The  reverse,  or  left,  stub  of 
the  check  book  shows  a  dupli- 
cate of  the  deposit  ticket,  and 
each  check  is  listed  under  the 
name  of  the  maker,  for  the 
convenience  of  the  depositor. 

This  form  is  convenient  for 
recording  a  deposit  of  a  limited 
number  of  items,  but  when  a 
lengthy  deposit  ticket  is  made  up, 
the  plan  given  on  page  69  is  more 
convenient,  as  a  large  number  of 
items  could  not  be  recorded  on  the  reverse  stub  of  an  ordinary  check  book. 

When  the  depositor  wishes  to  withdraw  money  from  the  bank,  he 
writes  an  order  called  a  Check. 


/Cy^ 


A  Check  Book  is  a  book  of  blank 
checks  furnished  to  the  depositor 
by  the  bank.  It  consists  usually  of 
two  parts,  the  stubs  and  the  checks. 
The  stub  contains  a  memorandum 
of  the  check  and  is  valuable  for  ref- 
erence after  the  check  has  been  de- 
tached, and  for  comparison  when 
the  check  is  returned,  canceled. 

The  illustration  on  page  71  shows 
one  page  of  a  check  book,  both 
the  checks  and  the  stubs  having 
been  filled  out.  The  checks  may  be 
totaled  and  the  amount  carried  for- 
ward to  the  top  of  the  next  page. 


Deposit  Ticket 


The  proof  of  cash  is  necessary  at 
stated  times,  and  in  proving  cash  the 
check  book  must  be  depended  on  to 
show  the  condition  of  the  bank  account. 
By  keeping  a  total  of  the  checks  drawn  and  a  total  of  the  deposits  made,  the  balance 
shown  by  the  check  book  may  be  readily  ascertained  at  any  time. 


THE  UNION  BANK 

DEPOSITED  BY 
Please  list  each  check  separately 


Bills_ 
Gold- 


Silver, 


Checks  "Tw^^ 


^>frf7y 


^^^./^x 


-</Z^y-A-^i^^^ ./  a.5-z 


^/?  — 


jji 


^2^ 


/  (P<$'\J~C> 


/  /"^yjr  sV^ 


7^ 


IJL 


INTRODUCTION  TO  BUSINESS  PRACTICE 


71 


I 


N 


:s 


m 

^    ^ 


^ 


<s 


^ 


72  BOOKKEEPIlSra 

The  deposits  may  be  recorded  on  the  reverse,  or  left,  stub,  an  illustra- 
tion of  which  is  given  on  page  70.  The  deposits  may  be  carried  forward 
on  the  reverse  stub,  and  then  the  balance  shown  by  the  check  book  may 
be  readily  found  by  finding  the  difference  between  the  total  deposits  and 
the  total  checks. 

Page  71  is  an  illustration  of  a  common  form  of  check  book.  It  shows  the  transac- 
tions of  a  depositor,  Charles  H.  Jones,  with  The  Union  Bank  for  two  consecutive  days. 

Notice  the  manner  of  filling  out  the  check,  the  important  items  of  the  check  re- 
produced on  the  stub,  the  total  after  the  second  check  has  been  written,  and  the 
amount  of  the  two  checks  carried  forivard. 

Great  care  should  he  taken  in  the  writing  of  each  check.  There  should  be  no  erasures 
of  any  kind  in  the  check  book. 

The  first  figure  in  the  amount  of  a  check  should  be  written  close  to  the  dollar 
sign ;  an  amount  in  figures  should  be  written  as  follows :  $15-.  The  first  word  in 
writing  the  amount  should  begin  at  the  head  of  the  line,  and  cents  should  be  ex- 
pressed as  a  fraction  of  a  dollar,  as  25/100 ;  any  other  space  on  this  line  should  be 
filled  in  with  a  waved  or  broken  line. 

It  should  be  borne  in  mind  that  there  are  manifold  ways  of  keeping  a  check  book. 
The  method  outlined  herewith  is  a  simple  one  and  well  serves  the  need  of  the  student 
in  his  work  in  business  practice. 

The  Left,  or  Reverse,  Stub  may  be  used  for  recording  any  memoranda 
that  the  depositor  deems  important. 

Deposits  should  be  entered  in  the  pass  book  by  the  teller  of  the  bank 
at  the  time  the  deposit  is  made.  If  at  any  time  a  deposit  is  made  with- 
out the  pass  book,  a  duplicate  deposit  ticket  should  be  obtained  by  the 
depositor. 

Different  banks  use  different  methods  for  keeping  records  in  a  pass 
book.  All  deposits  may  be  entered  in  it;  at  the  end  of  the  month  the 
checks  are  totaled  on  an  adding  machine,  the  amount  carried  to  the 
pass  book,  and  the  balance  shown. 

However,  it  is  more  common,  at  least  in  large  banks,  to  record  deposits 
in  a  pass  book,  and  at  the  end  of  each  month  all  deposits  and  all  checks, 
itemized  or  in  total,  are  entered  on  a  slip  or  on  an  envelope,  and  the 
balance  shown  as  a  monthly  statement.  This  statement,  together  with 
all  canceled  checks,  is  given  to  the  depositor  and  constitutes  a  statement 
of  his  dealings  with  the  bank  for  a  given  month. 

In  this  text,  in  business  practice,  all  deposits  will  be  entered  in  the 
pass  book  at  the  time  they  are  made. 

In  the  package  of  business  forms,  an  envelope  is  provided  for  each 
month  on  which  a  monthly  statement  of  the  bank  account  should  be 
made.  Upon  this  envelope  the  student's  name  should  be  written,  and 
as  checks  are  drawn  they  may  be  filed  in  it. 


INTRODUCTION  TO  BUSINESS  PRACTICE 


73 


We  UNION  BANK 

STATEMENT  OF  ACCOUNT 

DATE 

CHECKS 

DATE 

DEPOSITS 

//E^y>^ 

^ 

2/^^ 

___ 

Balance 

/ 

/Z- 

yj 

-_ 

>^.. 

'4/ 

2^^/^ 

_ 

/7 

/ 

/  /  7 

■r^ 

/C 

Z^O 

^ 

/ 

^/ 

.^^/^ 

X.f 

*  / 

r 

7^ 

Z3 

y  1 

3-0 

ZA 

/  ^ 

xr. 

///^ 

2-0 

2-^ 

^a 

^0 

/ 

/ 
1 

r<7 

3/ 

3  / 

?-^i 

- 

TOTALS: 

DEPOSITS 

Zy.ft? 

;,f 

CHECKS 

^r.^ 

4o 

TOTAL 

C^3 

iU 

BALANCE 

^^^/ 

/v 

At  the  end  of  a  month  a  statement  of  the  student's  bank  account 
should  be  made  on  the  outside  of  this  envelope,  recording  simply  all 
deposits  and  all  checks,  as  shown  in  the  above  illustration,  and  the 
balance. 


74  BOOKKEEPIKO 

The  deposits  in  the  pass  book  may  be  totaled  and  the  checks,  in  total, 
subtracted  therefrom,  thus  showing  the  balance  in  the  pass  book. 

Place  all  the  checks  in  the  envelope.  This  constitutes  a  complete 
monthly  statement  of  the  student's  bank  account. 


EXERCISE  39 
TRANSACTIONS  WITH  A  BANK 

Make  the  following  blank  forms :  rule  lengthwise  two  sheets  of  paper 
about  6x8  inches ;  rule  two  checks,  two  stubs,  and  the  reverse  stub  on 
each  sheet.  This  represents  a  page  of  a  check  book  and  the  reverse  stub. 
Follow  the  models  given  on  page  71. 

Under  date  of  March  1,  enter  on  the  reverse  stub  of  the  sheet  just 
ruled  a  deposit  of  $1500. 

Under  date  of  March  9,  write  a  check  for  |250,  in  favor  of  Henry  S. 
Lee,  No.  1.    Fill  out  the  stub  first  and  then  write  the  check. 

Under  date  of  March  13,  enter  a  deposit  of  $150. 

Under  date  of  March  16,  write  a  check  for  $137.50,  in  favor  of  Wm. 
G.  Howe,  No.  2.    Remember  to  fill  out  the  stub  first. 

Forward  the  total  deposits  to  the  reverse  stub,  and  the  total  checks  to 
the  regular  stub,  on  sheet  number  two. 

Under  date  of  March  19,  write  a  check  for  $100,  in  favor  of  E.  T.  Perry. 

Under  date  of  March  23,  enter  a  deposit  of  $75. 

Under  date  of  March  30,  write  a  check  for  $28.40,  in  favor  of  Amos 
H.  Wells. 

What  balance  now  remains  in  the  bank  ? 

This  exercise  may  be  continued  at  the  discretion  of  the  instructor. 

EXERCISE  40 

BUSINESS  FORMS 


Soston,  Mass.,  je?^.^?^^.  f,  19. 
T^eceived  of   -^^^^^^^-^.^^1^.  AJX^^ 


7--^^A-77-''~A^^.-r^^^^^  /"" dollars 


7^ 


$  ZC^(P' — :^-  '~i/7-r^^Jr^p'^^^.^^^^..<^^^ 


INTRODUCTION  TO  BUSINESS  PRACTICE  75 

The  Receipt.    Study  the  model  receipt,  page  74,  in  every  detail. 
Write  the  following  receipts  on  slips  of  paper  properly  ruled : 
S.  T.  Wade  owes  you  ^56.75,  and  pays  the  whole  amount. 
The  receipt  bears  these  words:  in  full  of  account. 

R.  O.  Warner  owes  you  1120.50,  and  pays  you  t75. 
The  receipt  bears  these  words :  to  apply  on  account. 

You  owe  John  Wheeler  $102.50,  and  pay  it  all. 

You  owe  J.  H.  Leaman  $62.50,  and  pay  him  |35. 

Near  the  bottom  of  page  19  is  an  open  ledger  account  with  J.  A.  Lyons. 
Write  the  receipt  that  he  should  give  you,  assuming  that  you  pay  the 
account  in  full. 

The  Invoice.  This  model  shows  how  an  invoice  should  be  made  out 
when  goods  are  bought  or  sold.  The  terms  are  on  account^  60  da.,  there- 
fore it  is  not  receipted. 


-^-s^^^^^  j.,-^^  ^^^_^ 

©r. 

T^e.rmR  ^^  ,c7^^ 

? 

.^r>^^.d^.^.  y^  -^^^^^^^^/'^.r<£^             vr:  ^^ 

/  .rv 

.ra 

/  £> 

— ^^z2-.52^i=^  ~X^^y^,.</^^.-r:^~^>€7^                   /T^-?^ 

r  / 

?    'T 

,r 

■-^^-^^<^^i^-/i^^^           /^ 

,r 

^l/^  ^^%'^^^^^^,,d-^^ 

7 

r.9 

>?.? 

4^/7  1 

(?r 

In  this  invoice  who  is  the  buyer?  the  seller?  What  is  meant  by  terms  60  da.f 
Note  that  the  dollar  sign  is  not  used  in  writing  either  the  prices  or  the  exten- 
sions on  an  invoice. 


76  BOOKKEEPING 

This  model  invoice  is  receipted  because  the  terms  are  cash. 


.r 


v-^^. 


_^£_ 


/r 


r.r 


^M  2/,tA<^s^- 


3^y-L 


2lL 


JT^ 


y^/^  rj^^AA 


.f^ 


^ 


^^=3:^,2^:^::^^^ 


/^f/-^^' 


.±jL 


6\ 


/.?*/ 


^^^^^  /  /^!/ 


^z: 


jLZ^ 


7^ 


V^j^c- 


-^^2^r^^.^!>i^<^^..^'^^^ 


^'^cZ^l^^^^.  ./^tP^^J^/-7^<^^..<?<^^  ^ 


Study  these  model  invoices  in  every  detail,  then  rule  two  sheets  of 
paper  according  to  the  model,  and  write  the  following  invoices.  Do 
your  best  work,  —  good  writing  and  neat,  legible  figures. 

Turn  to  Set  I,  page  42,  and  write  the  invoices  under  the  dates  of 
Jan.  4  and  9. 

Turn  to  Set  II,  page  52,  and  write  the  invoices  under  the  dates  of 
Feb.  6  and  9. 

Filing  Invoices.  For  convenience  in  handling,  invoices  may  be  folded 
lengthwise  with  the  printed  matter  outward. 

The  manner  of  folding  the  invoice  (noted  above)  is  not  imperative. 
The  invoice  may  be  folded  lengthwise,  the  printed  matter  within  ;  on  the 
left  end  write  the  name  of  the  seller,  the  amount  in  figures,  and  the  date. 

For  the  student's  work  in  business  practice  the  first  method  is  recommended. 

After  the  invoices  are  folded  a  rubber  band  may  be  placed  around 
them,  and  then  they  are  in  a  convenient  form  for  handling.  The  filing 
should  be  in  the  order  of  the  dates. 

These  suggestions  are  simply  for  the  students  in  the  classroom. 


INTRODUCTION  TO  BUSINESS  PRACTICE 


77 


The  Promissory  Note.    Study  all  the  details  of  the  following  model 
note  : 


fU^ZJZJL 


i./- 


^^^^<<>g^  ^^^;^;>^,yl.^^ - 


after  date^^ promise  to  pay  to 


the  order  nf  y/^tp-r-z^^.^y^^  ^^^^^>f^<r^^^  P^^.-f7r^- 


'^^^^.^^y^^r-^^^.^-T^.^^ijC^^.^^ 


fDoll 


ars 


at    J^^^.-t^^r-'iP^y^^^^!^^ 
Value  received 
^o.  /A. 'Dae'r^^Arr    ^r^^Y^-^rd-u  y^^::^^^ 


T 


Who  is  the  maker  of  this  note  ?  the  payee  ?  Does  it  draw  interest  ?  When  is  the 
maturity  of  the  note?  Who  holds  this  note  hefore  maturity?  After  it  is  paid  who 
will  hold  it  ?   Why  is  this  called  a  promissory  note  ? 

Write  the  following  notes  on  slips  of  paper.    Use  the  current  date. 

1.  Gave  Henry  A.  Morton  your  note,  at  60  da.,  with  interest,  payable 
at  the  First  National  Bank,  #250. 

2.  Received  of  Henry  S.  Mercer  his  note,  at  30  da.,  payable  at  The 
Union  Bank,  |128.50. 

3.  Gave  Wilson  &  Brown  your  note,  at  2  mo.,  payable  at  your  office, 
1175.20. 

4.  Received  of  A.  D.  Rose  &  Son  their  note,  at  1  mo.,  with  interest, 
payable  at  their  office,  $200. 

The  Purchase  Book.  The  following  model  represents  a  purchase 
book,  —  a  book  in  which  all  purchases  may  be  recorded. 

Model  Purchase  Book 


'  /  -^t^^^.^yy^^!^'^'i^?^z,y-c-^ 


NAMES   AND    ADDRESSES 


XERMS 


3(?  <S^€iX 


AMOUNT 


C4/J. 


f¥ 


S0(? 


J 


S:^^ 


^?z-<^^.<^ 


6^c 


S<P 


y 


X 


^zik^»^ 


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78 


BOOKKEEPING 


Various  books  are  designed  for  recording  purchases,  but  the  illustra- 
tion given  on  page  77  shows  the  general  plan  of  any  book  that  may 
be  used  for  this  purpose.  In  the  more  advanced  portion  of  this  work  an 
invoice  book  will  be  introduced. 

The  posting  of  this  book  is  explained  on  page  61. 

Daily  Cash  Proof.  In  the  following  sets  the  student  will  use  repre- 
sentative money  in  carrying  out  his  business  transactions.  At  the  close 
of  each  day's  business  cash  should  be  proved. 


DAILY  CASH  PROOF 


Name 


Date 


Cash  received  per  cashbook,  total     ^  y  ^  ^ , 

Cash  paid  per  cashbook,  total  /  kJ^  ^  ^ .         ' 


Balance  per  cashbook 


^4^^^_ 


A^a 


Cash  on  hand  per  cash  drawer  ^^^  ^^£— v 

Cash  in  bank  per  check  book  A^  ^  /a  ^ .  ^^^-^ 

Total  4^4^^^^ 


V  ^ 


How  to  prove  cash: 

1.  The  left  side  of  the  cashbook  shows  all  cash  received. 

2.  The  right  side  of  the  cashbook  shows  all  cash  paid  out. 

3.  The  difference  shows  the  amount  of  cash  the  business  has  on  hand. 

4.  The  money  in  the  cash  drawer  added  to  the  amount  in  the  bank 
should  equal  the  difference  shown  by  the  cashbook. 

5.  If  no  bank  account  is  kept,  the  cash  in  the  drawer  should  equal 
the  difference  shown  by  the  cashbook. 

6.  If  all  money  is  in  the  bank,  the  true  bank  balance  should  equal 
the  balance  shown  by  the  cashbook. 

It  is  suggested  that  the  above  form  of  proof  b^  used. 


mTRODUCTION  TO  BUSINESS  PRACTICE 


79 


EXERCISE  41 

THE  TRIAL  BALANCE 

Thus  far  all  trial  balances  have  been  made  by  taking  the  footings  of 
the  debit  and  the  credit  items  of  each  account,  omitting  all  accounts  that 
balanced.  It  is  a  common  practice  for  bookkeepers  to  take  a  trial  balance 
by  using  the  balance  of  each  account.  This  form  of  trial  balance  is  illus- 
trated herewith. 

Refer  to  the  model  trial  balance,  page  4 ;  compare  it  with  the  following  trial  balance : 


Trial  Balance,  January  31 

,19— 

James  Wilson 
Cash 

1123 

60 

2000 

Expense 
Mdse. 

50 

926 

40 

D.  Simons 

100 

0.  Lane 

200 

2200 

2200 

To  find  Errors  in  the  Trial  Balance.  If  the  debit  and  the  credit  items 
are  not  equal,  that  is,  do  not  balance,  observe  the  following  suggestions 
in  tracing  the  error : 

1.  Go  over  all  additions,  both  in  the  trial  balance  and  in  the  ledger. 

2.  Find  the  exact  amount  of  the  error ;  if  ten  or  some  'power  of  ten^  the 
error  is  usually  in  addition. 

3.  If  the  amount  of  the  error  is  exactly  the  same  as  some  amount  in 
the  journal,  the  trouble  is  likely  to  be  with  that  amount. 

4.  Divide  the  amount  of  the  error  in  the  trial  balance  by  2,  and 
look  for  an  amount  corresponding  to  this  result.  If  a  debit  item  has 
been  posted  to  the  credit,  it  will  cause  an  error  equal  to  twice  the  amount 
of  the  item  thus  posted. 

5.  If  the  amount  of  the  error  is  divisible  by  9,  the  error  is  probably 
the  result  of  the  transposition  of  figures. 

6.  If  necessary,  recheck  the  posting  to  determine  if  that  work  was 
done  correctly.  (This  manner  of  rechecking  is  described  on  page  19.) 
Rechecking  involves  a  great  deal  of  extra  work  ;  it  should  be  undertaken 
only  as  a  last  expedient. 

A  trial  balance  that  balances  is  not  absolute  proof  that  the  ledger  is  correct.  If 
a  credit  of  Merchandise  was  posted  to  the  credit  of  Cash,  it  would  not  affect  the 
trial  balance. 


SET  III.   GRAIN  AND  SEED  BUSINESS 


WORK  FOR  MARCH 


The  Object  of  this  set  is  to  give  systematic  drill  in  elementary  business 
practice.  Student  is  represented  as  the  proprietor.  Business  forms  are 
used,  and  all  transactions  in  cash  admit  the  handling  of  currency.  An 
account  is  kept  with  the  bank,  deposits  are  made  and  checks  are  drawn. 
This  set  covers  a  period  of  two  months,  March  and  April,  the  books 
being  closed  at  the  end  of  each  month. 

The  Books  used  in  this  set  are  the  journal,  the  cashbook,  the  sales 
book,  the  purchase  book,  the  statement  book,  and  the  ledger. 

All  business  forms  handled  are  either  Incoming  Papers  or  Outgoing  Papers. 
Incoming  papers  are  those  received  from  others ;  outgoing  papers  are 
those  given  to  others.  Incoming  papers  will  be  received  and  recorded 
by  the  student  as  in  business,  and  he  will  issue  and  record  all  outgoing 
papers  as  in  business. 

Different  selling  price  lists  may  be  used  if  desired. 

Twenty-five  selling  price  lists  are  provided  for  this  set.  When  the  in- 
structor gives  the  student  the  necessary  blank  forms  he  should  assign 
him  a  price  list.  Any  one  of  the  selling  price  lists  may  he  used  in  connection 
with  the  buying  price  list. 


Selling 

Price  Lists 

ARTICLE 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

Clover  Seed    .     . 

3.70 

3.65 

3.80 

3.75 

4.00 

3.88 

3.68 

3.73 

3.79 

3.71 

3.78 

Dwarf  Beans  .     . 

4.20 

4.30 

4.15 

4.25 

4.15 

4.38 

4.33 

4.38 

4.44 

4.21 

4.43 

Field  Corn      .     . 

.48 

.50 

.48 

.48 

.46 

.66 

.53 

.58 

.64 

.49 

.63 

Garden  Corn  .     . 

1.90 

1.95 

1.90 

1.80 

1.80 

2.08 

1.98 

2.03 

2.09 

1.91 

2.08 

Millet,  Common  . 

.98 

1.05 

.95 

.98 

.90 

1.16 

1.08 

1.13 

1.19 

.99 

1.18 

Oats 

.34 

.37 

.33 

.38 

.40 

.52 

.40 

.45 

.51 

.35 

.50 

Spring  Rye     .     . 

1.10 

1.16 

1.06 

1.15 

1.05 

1.28 

1.19 

1.24 

1.30 

1.11 

1.29 

Timothy  Seed      . 

2.40 

2.50 

2.40 

2.50 

2.65 

2.58 

2.53 

2.58 

2.64 

2.41 

2.63 

Wheat  .     .     .     . 

.90 

.96 

.90 

1.00 

1.00 

1.08 

.99 

1.04 

1.10 

.91 

1.09 

After  a  price  list  has  been  assigned,  copy  it  for  ready  reference.    Ask 
the  instructor  for  Business  Forms,  No.  i,  and  then  proceed  to  write  Set  III. 

Directions  and  Suggestions.    This  set  may  be  written  in  any  of  the 
following  ways: 

1.  Simply  record  the  transactions  as  in  the  preceding  sets. 

80 


SET  III.   GRAIN  AND  SEED 


81 


2.  In  addition  to  recording  the  transactions,  all  business  forms  may 
be  used. 

3.  In  addition  to  recording  the  transactions,  using  the  forms,  etc.,  all 
the  business  called  for  may^  be  done,  such  business  to  be  transacted 
according  to  the  directions  of  the  instructor. 

The  memoranda  and  all  directions  are  given,  so  that  complete  business  practice 
may  be  used  if  desired. 

4.  Prove  the  cash  at  the  close  of  each  day.    (See  model,  page  78.) 

.  5.  If  the  tablet  of  Incoming  Business  Forms  is  not  used,  make  out 
the  forms  on  page  82  and  file  them  in  the  envelope  for  Incoming  Papers^ 
before  beginning  Set  III,  and  use  them  instead  of  the  tablet. 

Unless  otherwise  instructed,  keep  the  cashbook  on  a  loose  sheet  of  journal  paper 
and  copy  at  the  close  of  the  month.  All  other  work  may  be  recorded  directly  in 
the  required  books. 

Incoming  Business  Forms  for  March 

These  incoming  forms  are  included  in  the  text  for  the  following  reasons : 

1.  All  material  in  any  given  set  is  included  in  the  text  proper. 

2.  The  student  is  able  to  make  a  study  of  the  work  of  the  set  before 
attempting  to  write  it ;  this  is  especially  important. 

3.  By  having  all  matter  included  in  the  text,  extended  and  varied 
reviews  are  made  possible. 


for  March  and  April 


12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

3.80 

3.80 

3.84 

3.76 

3.89 

3.69 

3.74 

3.81 

3.72 

3.82 

3.81 

3.83 

3.85 

3.77 

4.30 

4.45 

4.34 

4.26 

4.39 

4.34 

4.39 

4.46 

4.22 

4.47 

4.31 

4.48 

4.35 

4.27 

.58 

.65 

.62 

.54 

.67 

.54 

.59 

.66 

.50 

.67 

.59 

.68 

.63 

.55 

2.00 

2.10 

2.04 

1.96 

2.09 

1.99 

2.04 

2.11 

1.92 

2.12 

2.01 

2.13 

2.05 

1.97 

1.08 

1.20 

1.12 

1.04 

1.17 

1.09 

1.14 

1.21 

1.00 

1.22 

1.09 

1.23 

1.13 

1.05 

.44 

.52 

.48 

.40 

.53 

.41 

.46 

.53 

.36 

.54 

.45 

.55 

.49 

.41 

1.20 

1.31 

1.24 

1.16 

1.29 

1.20 

1.25 

1.32 

1.12 

1.33 

1.21 

1.34 

1.25 

1.17 

2.50 

2.65 

2.54 

2.46 

2.59 

2.54 

2.59 

2.66 

2.42 

2.67 

2.51 

2.68 

2.55 

2.47 

1.00 

1.11 

1.04 

.96 

1.09 

1.00 

1.05 

1.12 

.92 

1.13 

1.01 

1.14 

1.05 

.97 

A  tablet,  separate  from  the  text,  containing  all  the  incoming  business 
forms,  is  available  for  use  with  this  set  when  business  practice  is  used. 
All  incoming  checks  are  drawn  on  Traders  National  Bank. 

If  business  practice  is  not  used,  the  tablet  of  incoming  forms  and  the 
package  of  blank  business  forms  will  not  be  needed. 


82  BOOKKEEPING 

In  Set  III  all  merchandise  is  to  be  bought  at  the  following  prices, 
per  bushel : 


Clover  Seed 
$3.50 

Dwarf  Beans 

$4 

Field  Corn 
44^ 

Garden  Corn 

$1.75 

Millet,  Common 
90^ 

Oats 

30^ 

Spring  Rye 

$1 

Timothy  Seed 

$2.25 

Wheat 

80^ 

Form    1.  Invoice  of  E.  C.  Ferry,  City,  March  2.    Terms :  cash. 
50  bu.  Clover  Seed  100  bu.  Field  Corn 

100  bu.  Oats 

Form    2.  Invoice  of  S.  D.  Welch,  City,  March  5.    Terms :  on  account. 
20  bu.  Dwarf  Beans  40  bu.  Garden  Corn 

100  bu.  Millet  100  bu.  Wheat 

Form    3.  Receipt  of  Amos  Graves,  March  7,  in  your  favor,  for  rent  of 

the  store  for  March,  $35. 
Form   4.  Bill  of  David  Ross  for  office  books  and  stationery,  March  8. 

Office  Books,  $8.50  Stationery,  $4 

Form    5.  Invoice  of  Henry  Bruce,  City,  March  10.    Terms:  on  account. 
100  bu.  Spring  Rye  50  bu.  Timothy  Seed 

Form    6.  Bill  of  I.  N.  Moss,  City,  for  2  T.  coal  at  $5.20,  March  11. 

Terms:  cash. 
Form    7.  Bill  of  A.  C.  Webb,   City,   for  office  safe,    $75,   March  12. 

Terms:  cash. 
Form    8.  Invoice  of  Haynes  &  Co.,  City,  March  14.    Terms :  on  account. 
30  bu.  Dwarf  Beans  100  bu.  Spring  Rye 

200  bu.  Field  Corn  200  bu.  Wheat 

100  bu.  Millet 

Form    9.  Check  of  Boyd  &  Co.,  City,  for  $200,  in  your  favor,  March  23. 
Form  10.  Invoice  of  S.  D.  Welch,  City,  March  24.    Terms:  on  account. 
10  bu.  Dwarf  Beans  100  bu.  Millet 

100  bu.  Field  Corn  100  bu.  Oats 

20  bu.  Garden  Corn 

Form  11.  Invoice  of  Henry  Bruce,  City,  March  25.    Terms:  on  account. 
100  bu.  Spring  Rye  200  bu.  Wheat 

Form  12.  Note  of  Jesse  Watson,  City,  for  $180,  in  your  favor,  at  30  da., 

with  interest,  March  29. 
Form  13.  Check  of  John  Wells,  City,  for  $100,  in  your  favor,  March  29. 
Form  14.  Check  of  Oscar  Wilson,  City,  for  $242,  in  your  favor,  March  31. 


SET  III.    GRAIN  AND  SEED 


83 


Memoranda  of  Transactions  for  March 

March  i.  Begin  the  Grain  and  Seed  business,  investing  cash,  |2400. 

Place  the  above  raemorandunl  in  the  journal,  hut  make  no  journal  entry.  Make 
the  proper  entry  in  the  cashbook.  Receive  the  currency  from  the  instructor  and  put 
it  in  the  Business  Cash  envelope. 

1.  You  have  entered  into  an  agreement  with  Amos  Graves  for  the 
rental  of  his  store,  at  120  Main  Street,  at  |35  per  month. 

No  entry  is  required.  A  memorandum  of  this  agreement  may  be  made  and  filed 
with  the  incoming  papers. 

2.  Buy  of  E.  C.  Ferry,  City,  for  cash,  merchandise  as  per  invoice. 
Form  1. 

Remove  this  invoice  from  the  tablet  of  Incoming  Papers.  Note  the  extensions 
and  the  addition. 

In  business,  the  goods  received  are  compared  with  the  invoice,  and  if  found  to  be  cor- 
rect, check  marks  are  placed  at  the  leji,  as  shown  in  the  following  script  illustration  ; 
then  the  extensions  and  the  addition  are  verified  and  checked  as  shown  at  the  right. 

Verify  the  extensions  and  the  addition. 

Make  the  proper  entries  in  the  cashbook  and  the  purchase  book.  These  items 
should  be  checked  in  each.    The  check  mark  means  do  not  post. 

In  the  purchase  book  write  the  name,  the  address,  the  terms,  and  the  amount  on 
one  line. 

Pay  for  the  invoice. 

Fold  the  invoice  once  lengthwise,  face  outward,  and  place  it  in  the  Paid  Bills 
envelope. 


if^^,  /Unryf^ 


2^19. 


^errm  "^^^ 


i^uiS 


'-i^y.  ^-^rt^n^^^-^^^^ 


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84  BOOKKEEPING 

March  3.  Sell  John  Williams,  City,  for  cash,  at  the  prices  given 
herewith : 

20  bu.  Clover  Seed  at  $3.70  50  bu.  Field  Corn  at  ^^ 

40  bu.  Oats  at  34(^ 

Make  out  an  invoice  and  receipt  it.  If  correct  in  every  detail,  record  it  in  the 
sales  book  and  the  cashbook,  and  check  in  each.  Do  not  put  any  check  marks  on  any 
bill  of  goods  that  you  sell.  Receive  the  cash  and  place  it  in  the  Business  Cash 
envelope. 

Pass  the  bill  to  the  office,  or  dispose  of  it  according  to  directions  received. 

Take  great  pains  in  counting  all  cash. 

4.  Deposit  in  The  Union  Bank  cash,  |2000. 

Read  pages  68  and  70  for  instructions. 

Make  out  a  deposit  ticket.  Record  the  amount  in  the  check  book,  on  the  reverse 
stub. 

Place  the  currency  and  the  deposit  ticket  in  the  pass  book,  and  hand  it  to  the  bank. 

6.  Buy  of  S.  D.  Welch,  City,  on  account,  merchandise  as  per  invoice. 
Form  2. 

Remove  the  invoice  from  the  tablet.    Check  the  extensions  and  the  footing. 
Record  it  in  the  purchase  book.    Fold  and  place  it  in  the  Unpaid  Bills  envelope. 
Do  not  receipt  this  invoice.   Why  ? 

6.  Sell  John  Wells,  City,  on  account : 

5  bu.  Dv^arf  Beans  20  bu.  Garden  Corn 

50  bu.  Millet 

Write  the  invoice,  but  do  not  receipt  it.  Why  ?  Use  the  selling  prices  of  the  list 
assigned  to  you.  Record  in  the  sales  book.  Refer  to  the  model,  page  64.  Dispose  of 
the  invoice  according  to  directions  received. 

7.  Pay  Amos  Graves  cash,  for  rent  of  the  store  for  March,  $35,  Form  3. 

Remove  this  receipt.  Make  the  entry  in  the  cashbook.  Pay  the  money.  Place 
the  receipt  in  the  Paid  Bills  envelope. 

8.  Pay  David  Ross  cash,  for  office  books  and  stationery,  $12.50,  Form  4. 

Examine  and  check  the  bill.  If  correct,  pay  it.  Make  the  entry  in  the  cashbook. 
Fold  the  bill  and  file  it  in  the  Paid  Bills  envelope. 

9.  Give  S.  D.  Welch  your  check,  to  apply  on  account,  $200. 

Fill  out  the  stub  in  the  check  book,  No.  1.  (See  model  check  book,  page  71.) 
Write  the  check  and  detach  it.   Make  the  entry  in  the  cashbook. 

A  receipt  need  not  be  taken  when  an  amount  is  paid  by  check,  as  the  canceled 
check  will  be  returned  as  a  receipt.    However,  a  receipt  may  be  taken  if  desired. 

In  the  package  of  business  forms  there  is  an  envelope  for  keeping  a  record  of 
your  dealings  with  the  bank  for  one  month. 


SET  III.    GRAIN  AND  SEED  85 

If  the  checks  are  passed  to  an  office,  this  envelope  should  be  left  at  the  office.  The 
form  and  the  use  of  this  envelope  are  illustrated  and  explained  on  page  73.  Place  the 
student's  name  on  the  envelope.   As  checks  are  received,  they  may  be  filed  therein. 

If  the  checks  are  kept  by  the  student  at  his  desk,  he  may  keep  the  envelope  and 
do  this  work  himself. 

March  10.  Buy  of  Henry  Bruce,  City,  on  account,  merchandise  as  per 
invoice.  Form  5. 

Remove  this  invoice  from  the  tablet.  Examine  and  check  as  previously  instructed. 
Enter  in  the  purchase  book.    Fold  and  file  the  invoice. 

11.  Pay  the  bill  of  I.  N.  Moss  in  cash  for  2  T.  coal  at  $5.20,  Form  6. 
Remove  the  bill  from  the  tablet.    Examine  and  check  it.    If  correct,  pay  it. 

12.  Pay  the  bill  of  A.  C.  Webb  by  check,  for  office  safe,  |75,  Form  7. 

Remove  the  bill  from  the  tablet.  Total  the  two  checks  and  carry  the  amount 
forward  to  the  top  of  the  next  regular  stub. 

IS.  Receive  of  John  Wells  cash,  to  apply  on  account,  flOO. 

Write  a  receipt  in  favor  of  John  Wells  and  receive  the  currency.  Make  the  cash- 
book  entry.   Place  the  money  in  the  Business  Cash  envelope. 

14.  Buy  of  Haynes  &  Co.,  City,  on  account,  merchandise  as  per  invoice, 
Form  8. 

Examine  and  check  the  invoice,  and  then  proceed  as  usual. 

15.  Sell  Boyd  &  Co.,  City,  on  account : 

100  bu.  Field  Corn  50  bu.  Spring  Rye 

100  bu.  Millet  10  bu.  Dwarf  Beans 

Write  the  invoice  and  record  it  in  the  sales  book. 

16.  Deposit  currency,  $200. 

Make  out  the  deposit  ticket.  Record  it  in  the  check  book,  on  the  reverse  stub.  The 
total  of  the  deposits  may  now  be  carried  forward  to  the  top  of  the  next  reverse  stub. 
Place  the  currency  and  the  ticket  in  the  pass  book  and  hand  it  to  the  bank. 

17.  Pay  Henry  Bruce  by  check,  to  apply  on  account,  $112.50. 

Write  the  check  and  make  the  entry  in  the  cashbook.  How  do  you  dispose  of 
the  check  ? 

18.  Sell  Howard  Young,  City,  on  account,  at  the  prices  given  herewith : 
20  bu.  Clover  Seed  at  $3.65  10  bu.  Timothy  Seed  at  $2.50 

Write  the  invoice  and  record  it. 

19.  Sell  Jesse  Watson,  City,  on  account,  at  the  price  given  herewith ; 

200  bu.  Wheat  at  90^ 


86  BOOKKEEPING 

March  20.  Withdraw  cash,  for  personal  use,  |50. 

Take  |50  in  currency  from  the  Business  Cash  envelope  and  place  it  in  the  envelope 
for  Personal  Cash.  Make  the  entry  on  the  right  side  of  the  cashbook.  Under  what 
name  will  you  enter  it  ? 

23,  Receive  of  Boyd  &  Co.  their  check,  on  account,  |200,  Form  9. 
Remove  the  check  and  enter  it  in  the  cashbook.    Place  the  check  in  the  Business 
Cash  envelope. 

23.  Pay  Haynes  &  Co.  by  check,  to  apply  on  account,  $500. 
Write  the  check  and  make  the  entry. 

24.  Buy  of  S.  D.  Welch,  City,  on  account,  merchandise  as  per  invoice. 
Form  10. 

Examine  and  check  it. 

2d.  Buy  of  Henry  Bruce,  City,  on  account,  merchandise  as  per  invoice. 
Form  11. 

26.  Sell  John  Wells,  City,  on  account : 

50  bu.  Spring  Eye  150  bu.  Wheat 

27.  Give  S.  D.  Welch  your  note  at  8  da.,  to  apply  on  account,  |100. 
Write  the  note,  payable  at  my  office.    The  note  which  you  write  will  be  similar  to 

the  script  form  given  herewith.    The  signature  will  be  your  name. 


.after  date^^promise  to  pay  to 


the  order  nf  ~ Ji^.  ^f~  y^/^^^^^ 


at y?^?^^^  .-r^-jC^^yy  -^---^ ^^^ -:^^ 

*Oalue  received 


Make  the  entry  in  the  journal.    Dispose  of  the  note  according  to  directions 
received. 

28.  Sell  Boyd  &  Co.,  City,  on  account : 

100  bu.  Wheat  10  bu.  Clover  Seed 

5  bu.  Dwarf  Beans  10  bu.  Garden  Corn 

Write  the  invoice.    What  record  is  made  ? 

29.  Receive  of  Jesse  Watson  his  note  at  30  da.,  in  full  of  account. 
Form  12. 

Remove  the  note  from  the  tablet.    Make  the  journal  entry.    Place  the  note  in 
the  Unpaid  Bills  envelope. 


SET  III.    GRAIN  AND  SEED 


87 


March  29,  Receive  of  John  Wells  his  check,  on  account,  JlOO,  Form  13. 

Remove  the  check  and  enter  it  in  the  cashbook.  Place  the  check  in  the  Business 
Cash  envelope. 

31.  Sell  Oscar  Wilson,  City,  for  cash,  at  the  prices  given  herewith, 
receiving  in  payment  his  check.  Form  14. 

50  bu.  Field  Corn  at  48(^  100  bu.  Oats  at  34(^ 

10  bu.  Garden  Corn  at  $1.90  150  bu.  Spring  Rye  at  |1.10 

AVrite  the  invoice  ^nd  receipt  it.  Record  it  in  the  sales  book  and  the  cashbook, 
and  check  the  item  in  each.  Remove  the  check  and  place  it  in  the  Business  Cash 
envelope. 

31.  Deposit  the  three  checks  and  all  the  currency  on  hand. 

Take  the  currency  and  the  checks  from  the  Business  Cash  envelope ;  count  the 
currency  and  make  out  the  deposit  ticket. 

Indorse  each  check,  as  shown  in  the  following  illustration : 


\ 

2-f,    19-  ^0.  /,? 

Bank 

\v 

'Dnllnrs 

\^ 

^yOhjy^^ 

\. 

\ 

The  full  indorsement,  shown  in  the  accompanying  illustration,  is  the  one  most 
commonly  used  in  business,  and  some  banks  and  the  clearing  houses  insist  that 
this  form  must  be  used. 

The  blank  indorsement  is  simply  the  writing  of  one's  name  on  the  back  of  the 
paper.    (See  page  90.) 


88  BOOKKEEPING 

Place  the  currency  and  the  checks  in  the  pass  book  and  hand  it  to  the  bank. 
Examine  the  pass  book  to  see  that  all  is  entered  correctly. 

March  SI.  Give  Henry  T.  Dale,  your  clerk,  a  check  for  his  salary,  |30. 
Write  the  check  and  record  it. 

At  this  point  the  monthly  bank  statement  should  be  made. 

If  the  deposits  and  the  checks  have  been  passed  to  an  office,  these  instructions 
should  be  followed  by  the  one  in  charge  of  that  work;  if  not,  the  student  may 
make  the  statement  himself.    Proceed  as  follows : 

Enter  all  deposits  and  all  checks  on  the  outside  of  the  bank  envelope, 
in  which  the  checks  have  been  filed  from  day  to  day.  Refer  to  page  73 
for  illustrations.  Total  both  the  deposits  and  the  checks  and  find  the 
balance.    Place  the  checks  in  the  envelope. 

Total  the  deposits  in  the  pass  book,  subtract  the  total  checks  therefrom, 
enter  the  balance,  rule  and  foot.    Bring  the  balance  down  under  April  1. 

Before  closing  the  books,  hand  them  to  the  instructor  for  inspection 
and  approval. 

Record  the  following  in  the  journal,  in  the  usual  form,  at  the  cost 
price. 

Inventories,  March  31, 19 — 
Merchandise : 

40  bu.  Dwarf  Beans  60  bu.  Oats 

200  bu.  Pield  Corn  50  bu.  Spring  Rye 

20  bu.  Garden  Corn  .       40  bu.  Timothy  Seed 
150  bu.  Millet  50  bu.  Wheat 

Expense : 

Office  Safe  ^75. 

Office  Books  8. 

Office  Supplies  2.75 

Coal  6.40     192.15 


Closing  the  Work  for  March 

Close  each  of  the  following:  the  cashbook,  the  sales  book,  and  the 
purchase  book.    Refer  to  pages  63  to  65. 

Post  the  books  to  the  ledger,  three  accounts  to  the  page,  as  follows : 

1.  Post  the  journal,  writing  J'in  the  explanatory  column  of  the  ledger. 

2.  Post  the  cashbook,  writing  O  in  the  explanatory  column  of  the 
ledger. 

3.  Post  the  sales  book,  writing  S  in  the  explanatory  column  of  the 
ledger. 


EEVIEW  EXERCISES  89 

4.  Post  the  purchase  book,  writing  P  in  the  explanatory  column  of 
the  ledger. 

Foot  the  ledger  accounts. 

Take  a  trial  balance,  using  only  the  balance  of  each  account.  (See 
page  79.)    Do  not  forget  the  balance  of  cash  from  the  cashbook. 

Have  the  trial  balance  approved;  record  it  in  Blank  No.  1,  on  the 
page  indicated  by  the  index. 

Make  the  two  statements  and  the  verification ;  after  approval,  record 
them  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Close  the  ledger.    Take  a  second  trial  balance. 

Submit  all  work  to  the  instructor  for  approval. 

When  the  monthly  statement  of  your  bank  account  has  been  com- 
pleted, compare  each  check  with  the  stub  in  the  check  book ;  if  they 
agree,  put  a  large  check  mark  on  the  stub.  This  shows  that  the  check 
issued  has  been  returned  canceled. 

Does  the  balance  of  your  monthly  bank  statement  agree  with  the  balance  shown 
in  your  check  book  ?   Place  the  canceled  checks  in  the  Paid  Bills  envelope. 


EXERCISE  42 

A  Written  Review 

The  following  review  exercises  are  suggested : 

a.  Journalize  orally  or  in  writing  each  transaction  in  March. 

b.  Use  trial  balances  1  and  2,  page  28.    Make  the  two  statements, 
using  $25  for  the  expense  inventory  in  each  statement. 

c.  Use  Exercise  31,  I  and  II,  pages  33  and  34  for  closing  the  ledger. 


INDORSEMENTS 

An  Indorsement  is  the  writing  of  one's  name  on  the  back  of  commercial 
paper  with  the  intent  to  transfer  the  title  or  to  assume  legal  responsi- 
bility for  its  payment. 

Sometimes  a  payment  of  interest,  or  a  partial  payment  of  the  face,  is  recorded  on 
the  back  of  an  instrument. 

The  Object  of  indorsement  is  to  effect  a  transfer  of  the  title,  or  to  make 
the  indorser  conditionally  liable  for  payment,  or  both. 
Indorsements  are  made  by  using  a  rubber  stamp  or  by  writing. 

The  indorsements  most  commonly  used  are  the  special  or  fuM^  the 
blank,  the  qualified,  and  the  restrictive. 


90 


BOOKKEEPING 


^^^ 


Blank 


C::^^K^-^^^^z>^^ /'^-^^ 


Qualified 


or 


Special  A  special   indorsement   names 

the  indorsee ;  the  instrument 
could  not  again  be  negotiated 
without  the  indorsee's  indorse- 
ment. 

A  blank  indorsement  names  no 
indorsee.  Any  holder  may,  how- 
ever, convert  this  into  a  special 
indorsement  by  writing  "  Pay  to 
Qih  name)  or  order"  above  the 
blank  indorsement. 

A  qualified  indorsement  simply 
passes  the  title  without  rendering 
the  indorser  liable.  In  form,  this 
nidorsement  may  be  either  in 
blank  or  special. 

A  restrictive  indorsement  con- 
stitutes the  indorsee  an  agent  of 
the  indorser,  usually  for  the  col- 
lection of  the  paper. 

This  form  of  indorsement  is  not  com- 
mended by  banks  and  clearing  houses. 

Note  the  indorsement  on  page 
87.  All  commercial  paper  offered 
for  deposit  at  a  bank  must  be  in- 
dorsed, and  the  special  indorse- 
ment is  most  commonly  used. 

This  form  is  a  protection  to  the 
lawful  holder  because  the  payee 
is  named,  and  payment  will  be 
made  only  on  his  order,  by  in- 
dorsement. 

If  a  check  or  a  note  bearing 
a  special   indorsement  is  lost  or 
stolen,  it  is  valueless  to  such  a  holder. 

When  one  has  a  check  cashed  at  the  bank,  the  blank  indorsement 
may  be  used,  as  the  check  will  be  canceled  as  sooii  as  cashed. 

As  the  qualified  indorsement  relieves  the  indorser  of  responsibility  for 
payment,  commercial  paper  bearing  this  indorsement  should  be  accepted 
with  great  caution. 


Restrictive 


SET  III.   GRAIN  AND  SEED  BUSINESS 

WORK  FOR  APRIL 

The  memoranda  following  are  a  continuation  of  the  memoranda  for 
March.  No  new  principles  are  introduced,  and  the  familiar  business 
forms  are  used.  As  such  full  and  explicit  instructions  were  given  in 
March,  much  explanatory  matter  will  be  omitted  in  April.  If  anything 
is  not  understood,  refer  to  a  similar  transaction  in  the  preceding  month. 

Directions  and  Suggestions.  The  following  general  directions  should 
be  observed: 

1.  Use  the  same  price  list,  the  same  books,  etc.,  as  in  March. 

2.  Begin  a  new  page  in  the  journal.  In  the  sales  book  leave  a  space 
of  three  lines,  then  write  the  first  sale  in  April  under  the  last  sale  in 
March. 

3.  The  balance  brought  down  from  the  March  cashbook,  under  April  1, 
is  to  be  reckoned  with  the  cash  receipts  in  April.  Use  a  new  envelope  for 
the  bank  account.   Record  the  balance  at  the  head  of  the  deposit  column. 

Incoming  Business  Forms  for  April 
Form  15.  Invoice  of  Henry  Bruce,  City,  April  6.    Terms :  on  account. 

50  bu.  Clover  Seed  300  bu.  Oats 

50  bu.  Garden  Corn  100  bu.  Millet 

Form  16.  Invoice  of  S.  D.  Welch,  City,  April  9.    Terms :  on  account 

200  bu.  Field  Corn  100  bu.  Spring  Rye 

200  bu.  Wheat 

Form  17.  Invoice  of  C.  V.  Cronin,  City,  April  11.    Terms:  cash. 

50  bu.  Timothy  Seed 

Form  18.  Note  of  Boyd  &;  Co.,  City,  for  |100,  in  your  favor,  at  10  da., 

April  14. 
Form  19.  Check  of  Howard  Young,  City,  for  |145,  in  your  favor,  April  15. 
Form  20.  Check  of  Boyd  &  Co.,  City,  for  |165,  in  your  favor,  April  23. 
Form  21.  Check  of  Boyd  &  Co.,  City,  for  |100,  in  your  favor,  April  24. 
Form  22.  Invoice  of  Smith  &  Bowers,  City,  April  25.    Terms :  cash. 

20  bu.  Dwarf  Beans  200  bu.  Field  Corn 

50  bu.  Garden  Corn 
91 


92  BOOKKEEPING 

Form  23.  Check  of  Jesse  Watson,  City,  for  $175,  in  your  favor,  April  27. 
Fonn  24.  Check  of  Jesse  Watson,  City,  for  $180.90,  in  your  favor,  April  28. 
Form  25.  Check  of  Howard  Young,  City,  for  |90,  in  your  favor,  April  29. 

Memoranda  of  Transactions  for  April 

April  1.  Give  Amos  Graves  your  check  for  the  rent  of  the  store  for 
April,  135. 

1.  Give  Henry  Bruce  your  check  in  full  of  account. 

Turn  to  Henry  Bruce's  account  in  the  ledger  and  find  the  balance  of  his  account; 
write  the  check  for  this  amount. 

3.  Receive  of  Howard  Young  cash,  in  full  of  account,  |98. 

Turn  to  Howard  Young's  account  in  the  ledger  and  verify  the  balance.  Write 
the  receipt  and  get  the  money.    Enter  it  in  the  cashbook. 

4.  The  note  in  favor  of  S.  D.  Welch  falls  due  to-day;  pay  it  by  check. 

Write  the  check.  Pass  it  in  and  receive  the  canceled  note.  The  note  will  be  can- 
celed by  writing  across  the  face,  Paid  April  4, 19 — .  Make  the  entry  in  the  cashbook. 
What  account  is  debited  in  the  cashbook?  Place  the  canceled  note  in  the  Paid 
Bills  envelope. 

6.  Buy  of  Henry  Bruce,  City,  on  account,  merchandise  as  per  invoice, 
Form  15. 

Remove  the  invoice  from  the  tablet  and  proceed  as  usual. 

7.  Sell  Howard  Young,  City,  on  account,  at  the  prices  given  herewith: 

100  bu.  Field  Corn  at  48(^  50  bu.  Millet  at  98^ 

20  bu.  Timothy  Seed  at  $2.40 

9.  Give  S.  D.  Welch  your  check,  to  apply  on  account,  $200. 
9.  Buy  of  S.  D.  Welch,  City,  on  account,  merchandise  as  per  invoice, 
Form  16. 

10.  Sell  Boyd  &  Co.,  City,  on  account : 

30  bu.  Garden  Corn  20  bu.  Clover  Seed 

100  bu.  Oats 

11.  Buy  of  C.  V.  Cronin,  City,  for  cash,  merchandise  as  per  invoice, 
Form  17. 

Check  the  invoice ;  if  it  is  correct,  write  a  check  in  payment. 

W.  Sell  P.  H.  Morse,  City : 

20  bu.  Timothy  Seed  100  bu.  Field  Corn 

100  bu.  Wheat 


SET  III.   GRAIN  AND  SEED  93 

Receive  cash,  ♦125;  balance  on  account. 

Write  the  bill.  Terms  :  cash,  $125  ;  balance  on  account.  Enter  the  entire  bill  in 
the  sales  book,  and  the  cash  received  in  the  cashbook  as  a  receipt  on  account.  Neither 
entry  should  be  checked.  Why?  Record  the  amount  of  the  cash  on  the  bill  and 
receive  the  money. 

April  13.  Receive  of  Boyd  &  Co.  their  note  at  10  da.,  to  apply  on 
account,  |100,  Form  18. 

Place  the  note  in  the  Unpaid  Bills  envelope. 

13,  Give  Henry  Bruce  your  note  at  30  da.,  to  apply  on  account,  $200, 
payable  at  his  office. 

15.  Sell  Jesse  Watson,  City,  on  account : 

20  bu.  Dvrarf  Beans  50  bu.  Spring  Rye 

50  bu.  Millet  10  bu.  Timothy  Seed 

15.  Receive  of  Howard  Young  his  check  for  invoice  of  April  7,  $145, 
Form  19. 

17.  Deposit  the  check  and  all  currency  on  hand  except  |25. 

18.  Give  S.  D.  Welch  your  check  in  full  for  the  invoice  of  April  9,  |348. 
Verify  the  amount  by  referring  to  the  purchase  book. 

19.  Sell  Howard  Young,  City,  on  account,  at  the  price  given  herewith : 

100  bu.  Wheat  at  90^ 

20.  Sell  F.  G.  Morgan,  City,  for  cash,  at  the  prices  named  herewith : 
10  bu.  Clover  Seed  at  |3.70  10  bu.  Timothy  Seed  at  |2.40 

Write  a  receipted  bill  and  enter  it  in  the  sales  book  and  the  cashbook;  check  the 
item  in  each.   Pass  in  the  bill  and  receive  the  currency. 

M.  Sell  Boyd  &  Co.,  City,  on  account : 

30  bu.  Timothy  Seed  20  bu.  Garden  Corn 

50  bu.  Millet  40  bu.  Spring  Rye  ' 

22.  Sell  John  Wells,  City,  on  account : 

200  bu.  Oats  50  bu.  Millet 

100  bu.  Field  Corn 

23.  Receive  of  Boyd  &  Co.,  their  check,  to  apply  on  account,  $165, 
Form  20. 

24.  Receive  of  Boyd  &  Co.  their  check  in  pa3rment  of  their  note  due 
to-day,  tlOO,  Form  21. 

Enter  the  amount  of  the  check  in  the  cashbook.  Under  what  name  ?  Cancel  the 
note  and  pass  it  in. 


94  BOOKKEEPING 

April  M,  Deposit  the  two  checks  and  all  currency  on  hand. 
Indorse  the  checks. 

25.  Buy  of  Smith  &  Bowers,  City,  for  cash,  merchandise  as  per  in- 
voice. Form  22. 

Examine  and  check  the  invoice ;  if  correct,  pay  it  by  check.  Enter  in  the  purchase 
book  and  the  cashbook,  checking  the  item  in  each. 

26.  Sell  Johnson  &  Pease,  City,  for  cash,  at  the  prices  named  herewith: 

10  bu.  Dwarf  Beans  at  $4.20  100  bu.  Field  Corn  at  ^^ 

25  bu.  Garden  Corn  at  |1.90 

After  entering  the  invoice  in  the  required  books,  receipt  it,  pass  it  in,  and  receive 
the  currency. 

27.  Receive  of  Jesse  Watson  his  check,  to  apply  on  account,  |175, 
Form  23. 

28.  Prepay  your  note  in  favor  of  Henry  Bruce  by  check.  Face  of  the 
note,  |200  ;  discount,  50(^ ;  amount  of  the  check,  $199.50. 

This  note  has  15  da.  to  run,  and  the  interest  on  $200  for  15  da.  is  50^.  Write  the 
check.  Enter  it  in  the  cashbook  as  follows  :  on  the  right  side  debit  Bills  Payable  for 
$200  ;  on  the  left  side  credit  Interest  for  50^.  Hand  in  the  check  and  receive  the 
note.  Across  the  face  of  the  note  write.  Paid  April  28, 19 — .  Place  the  canceled  note 
in  the  Paid  Bills  envelope. 

Interest  and  discount  are  practically  synonymous  terms,  interest  is  paid,  usually, 
at  the  maturity  of  a  loan,  and  discount  is  allowed  before  such  maturity.  For  this 
reason  all  discount  items  will  be  entered  as  Interest. 

Study  this  transaction  until  it  is  understood.  The  discount  and  the  prepayment  of 
notes  are  common  business  transactions. 

28.  Receive  of  Jesse  Watson  his  check  for  note  and  interest  due  to-day, 
Form  24.    Face  of  the  note,  $180  ;  interest,  90(/;. 

What  two  entries  are  made  in  the  cashbook  ?   Cancel  the  note  and  pass  it  in. 

29.  Receive  of  Howard  Young  his  check  for  the  invoice  of  April  19, 
Form  25. 

30.  Give  Henry  T.  Dale,  your  clerk,  a  check  for  his  salary,  $30. 
SO.  Deposit  the  checks  and  all  currency  on  hand. 

Indorse  the  checks. 

30.  Withdraw  by  check  the  balance  on  deposit  in  The  Union  Bank. 

This  withdrawal  is  made  as  a  matter  of  convenience  in  closing  the  set.  The 
amount  of  the  check  is  for  the  balance  in  the  bank.  Make  the  check  payable  to  Self 
and  pass  it  in.   No  entry  is  required. 

Proceed  with  your  bank  account  as  you  did  at  the  close  of  March. 

Before  closing  the  books  hand  them  to  the  instructor  for  inspection  and  approval. 


SET  III.   GRAIN  AKD  SEED  96 

Record  the  following  in  the  journal,  in  the  usual  form,  at  the  cost 
price  : 

Inventories,  April  30,  19 — 
Merchandise: 

30  bu.  Dwarf  Beans  50  bu.  Millet 

20  bu.  Clover  Seed  60  bu.  Oats 

200  bu.  Field  Corn  60  bu.  Spring  Rye 

45  bu.  Garden  Corn  50  bu.  Wheat 

Expense : 

Office  Safe  $75. 

Office  Books  7.50     $82.50 

Closing  the  Work  for  April 

After  looking  over  the  closing  of  each  book  in  March,  close  the  cash- 
book,  the  sales  book,  and  the  purchase  book. 

The  careful  bookkeeper  checks  his  work  at  every  step.  Check  all  additions  before 
writing  the  results  in  ink.  A  simple  way  to  check  addition  is  to  add  the  columns  in 
reverse  order.   If  the  results  agree,  the  work  may  be  assumed  to  be  correct. 

Post  the  books  to  the  ledger.  Post  to  the  same  accounts  as  in  March. 
If  any  new  accounts  are  to  be  added,  allow  one  third  of  a  page  for  each. 

Foot  the  ledger  accounts. 

Take  a  trial  balance ;  after  approval,  record  it  in  Blank  No.  1,  on  the 
page  indicated  by  the  index. 

Make  the  two  statements  and  the  verification ;  after  approval,  record 
them  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Close  the  ledger.    Take  a  second  trial  balance. 

Submit  all  work  to  the  instructor  for  approval. 

When  your  monthly  bank  statement  has  been  completed,  compare  each 
check  with  the  stub  in  the  check  book.    If  they  agree,  check  the  stub. 

Place  all  canceled  checks  in  the  Paid  Bills  envelope. 


EXERCISE  43    ^  ^J^v-w^ 
A  Written  Review 

The  following  review  exercises  are  suggested: 

1.  Journalize  orally  or  in  writing  each  transaction  in  April. 

2.  Use  trial  balances  3  and  4,  page  28.  Make  the  two  statements, 
and  the  verification  for  each ;  use  $30  for  the  expense  inventory  in  each 
statement. 


96  BOOKKEEPING 

3.  Write  from  memory  on  blank  paper,  cut  to  the  proper  size,  the 
following  business  forms : 

a.  A  Receipted  Bill.  Jan.  17,  C.  H.  Palmer,  Trenton,  N.J.,  bought  of 
Student  for  cash,  less  3%:  25  doz.  table  knives  at  $7.50,  15  doz.  nail 
hammers  at  |9,'  25  doz.  safety  locks  at  |4.50. 

h.  A  Promissory  Note.  Jan.  20,  Student  gave  James  B.  Stevens  a 
60-da.  interest-bearing  promissory  note  payable  at  First  National  Bank. 
Face  of  the  note,  $125. 

c.  A  Receipt.  Jan.  22,  Frank  H.  Jackson  paid  Student  $127.85  in  full 
for  invoice  of  Jan.  12. 

d.  A  Check.  Jan.  25,  Student  gave  William  E.  Hitchcock  a  check  on 
Commonwealth  Trust  Company  for  $200. 


EXERCISE  44 

INTEREST  AND  DISCOUNT 

The  rate  of  interest  allowed  by  law  is  called  the  Legal  Rate.  Persons 
may  agree  to  pay  less  than  this  rate,  but  not  more,  unless  a  higher  rate 
by  special  agreement  is  permitted  by  statute.  If  an  agreement  for  the 
payment  of  interest  specifies  no  rate,  the  highest  legal  rate  in  the  state 
where  the  contract  is  signed  will  be  understood. 

In  the  Commercial  World  12  mo.  of  30  da.  each  —  360  da.  —  are  reckoned 
as  1  yr.    In  bank  discount  the  exact  number  of  days  is  used. 

Throughout  the  business  practice  employed  in  this  text  the  rate  will 
be  6%,  based  on  the  commercial  year  of  360  da. 

This  method  is  not  exact,  but  it  is  the  most  common  because  the  most  con- 
venient. It  has  been  legalized  by  statute  in  some  states  and  is  generally  used  in 
all  the  states. 

A  great  variety  of  methods  is  employed  to  compute  interest  and  dis- 
count, but  it  is  suggested  that  the  student  use  the  day  method,  as  follows : 
Point  off  to  the  left  three  decimal  places  in.  the  principal,  multiply  by 
the  number  of  days,  and  then  divide  by  6.    Cancel  when  possible. 

Example.  What  is  the  interest  on  $146.50  for  50  da.  at  6%  ? 

Solution.    .1465  x  50  =  7.325. 

7.325  H-  6  =  1.22,  or  $1.22,  the  required  interest. 

When  a  man  borrows  money  at  a  bank,  he  not  infrequently  pays  the 
interest  in  advance ;  when  he  sells  a  note  to  a  bank,  he  allows  discount 
to  the  bank,  and  such  allowance  is  called  Bank  Discount. 


INTEREST  AND  DISCOUNT  97 

The  maturity  of  negotiable  paper  is  determined  as  follows :  When  the 
time  is  expressed  in  months,  calendar  months  are  used  to  fix  the  date  of 
maturity ;  but  when  the  time  is  expressed  in  days,  the  exact  number  of 
days  is  used. 

To  illustrate :  A  note  dated  Jan.  28,  29,  30,  or  31,  at  1  mo.,  will  mature  on 
Feb.  28  (leap  years  excepted);  but  a  note  with  any  of  the  dates  just  noted  at  30  da. 
will  mature  on  Feb.  27,  28,  March  1,  or  2,  respectively. 

The  Tenn  of  Discount  is  the  time  from  the  date  of  discount  to  the 
maturity  of  the  note.  Banks  differ  as  to  method  in  finding  the  term,  but 
in  this  text  the  exact  number  of  days  will  he  used  uniformly. 


EXERCISE  45 

INTEREST  AND  DISCOUNT  ENTRIES 

This  exercise  is  not  a  set,  but  a  series  of  illustrations.  It  may  be  used 
first  as  an  oral  exercise. 

Use  a  sheet  of  journal  paper  for  the  cashbook,  and  enter  the  following  transac- 
tions ;  balance  and  rule  the  cashbook. 

May  1.  Student  begins  business  and  invests  cash,  |1600. 

2,  Give  Henry  A.  Dunton  a  check  for  your  note,  which  falls  due 
to-day,  $172.50. 

4,  Receive  a  check  from  Henry  A.  Gray  for  his  note,  which  is  due 
to-day,  1235.20. 

6.  Pay  your  note  and  interest,  due  to-day,  in  favor  of  H.  H.  James, 
in  cash.    Face  of  the  note,  $325  ;  interest,  $11.50. 

8.  Receive  of  Hale  &  Son  their  check  for  their  note  and  interest, 
due  to-day.    Face  of  the  note,  $220.35;  interest,  $7.75. 

9.  Discount  at  The  Union  Bank  W.  K.  Marsh's  note.  Face  of  the 
note,  $300 ;  discount  allowed  for  45  da. 

What  entry  is  made  on  the  left  side  of  the  cashbook  ?  on  the  right  side  ? 

12.  Prepay  your  note  in  favor  of  Geo.  R.  Gushing.  Face  of  the  note, 
$400  ;  discount  allowed  for  30  da. 

20.  Receive  a  check  from  Johnson  &  Co.  for  their  note,  due  to-day* 
Face  of  the  note,  $256.25. 

24.  Prepay  your  note  in  favor  of  E.  R.  Sterling.  Face  of  the  note, 
$222.40  ;  discount  allowed  for  60  da. 

26.  Discount  at  First  National  Bank  T.  T.  Hunger's  note.  Face  of 
the  note,  $257.80  ;  discount  allowed  for  60  da. 

30.  Make  an  additional  investment  in  the  business  in  cash,  $500. 


98 


BOOKKEEPING 


EXERCISE  46 


COMPOUND  ENTRIES 

The  Compound  Entry  is  explained  on  page  46.  Refer  to  that  explana- 
tion before  proceeding  with  this  exercise. 

A  Simple  Entry  consists  of  one  debit  and  one  credit. 

Several  of  the  preceding  interest  and  discount  entries  are  here  used 
as  illustrations  of  compound  entries ;  they  will  serve  for  reference  in 
subsequent  work. 

Journalize  Exercise  45. 

The  making  of  these  entries  in  both  the  cashbook  and  the  journal  will  make  the 
debits  and  the  credits  clearer  in  each  transaction. 


MaijG.  Bills  Pay.  |325. 

Interest  11.50 

Cash  $336.50 

MaijO.  Cash  $297.75 

Interest  2.25 

Bills  Eec.  $300. 


Maij    8.  Cash  $228.10 

Bills  Rec.  $220.35 

Interest  7.75 

May  12.  Bills  Pay.  $400. 

Cash  $398. 

Interest  2. 


Selling  Price  Lists 


ARTICLE  AND  QUANTITY 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

Carpenter's  Chis- 
els, ^-in.,  doz.  . 

4.75 

5.00 

5.00 

5.00 

5.10 

4.96 

5.01 

5.06 

5.11 

5.16 

4.76 

Coal  Hods,  doz.  . 

9.00 

10.00 

9.00 

9.00 

9..30 

9.21 

9.26 

9.31 

9.36 

9.41 

9.01 

Copying  Presses, 
each  .... 

8.00 

7.50 

8.00 

8.25 

8.20 

8.21 

8.26 

8.31 

8.36 

8.41 

8.01 

Door  Knobs,  doz. 

1.00 

1.20 

1.10 

1.10 

1.05 

1.21 

1.26 

1.31 

1.36 

1.41 

1.01 

Grindstones,  each 

.5.00 

6.00 

5.00 

5.25 

5.20 

5.21 

5.26 

5.31 

5.36 

5.41 

5.01 

Hammers,  doz.    . 

8.00 

9.00 

8.00 

8.20 

8.60 

8.21 

8.26 

8.31 

8.36 

8.41 

8.01 

Handsaws,  doz.   . 

21.00 

22.50 

21.50 

22.00 

22.75 

21.21 

21.26 

21.31 

21.36 

21.41 

21.01 

Ice-cream  Freez- 
ers, each      .     . 

3.25 

3.20 

3.30 

3.10 

3.30 

3.46 

3.51 

3.56 

3.61 

3.66 

3.26 

Knives  and  Forks, 
set      .... 

1.60 

1.50 

1.75 

1.70 

1.65 

1.81 

1.86 

1.91 

1.96 

2.01 

1.61 

Lanterns,  doz.     . 

7.50 

8.00 

7.80 

8.00 

7.75 

7.71 

7.76 

7.81 

7.86 

7.91 

7.51 

Mortise  Locks, 
doz.    .... 

6.00 

6.80 

6.25 

6.20 

6.35 

6.21 

6.26 

6.31 

6.36 

6.41 

6.01 

Nails,  8d,  wire,  keg 

4.00 

4.25 

4.25 

4.20 

4.20 

4.21 

4.26 

4.31 

4.36 

4.41 

4.01 

Planes,  ^4,  doz.  . 

30.00 

32.00 

30.00 

29.00 

31.00 

30.21 

30.26 

30.31 

30.36 

30.41 

.30.01 

Railroad  Picks, 
9-lb.,  doz.    .     . 

13.00 

12.00 

15.00 

12.50 

14.25 

13.21 

13.26 

13.31 

13.36 

13.41 

13.01 

Steelyards,  doz.  . 

16.00 

17.50 

18.00 

16.25 

15.80 

16.21 

16.26 

16.31 

16.36 

16.41 

16.01 

Steel  Axes,  doz.  . 

12.00 

12.50 

13.00 

12.25 

12.50 

12.21 

12.26 

12.31 

12.36 

12.41 

12.01 

Try-squares,  6- in., 
doz 

6.00 

7.00 

6.30 

6.50 

6.20 

6.21 

6.26 

6.31 

6.36 

6.41 

6.01 

SET  IV.   GENERAL  HARDWARE  BUSINESS 

WORK  FOR  MAY 

The  Object  of  this  set  is  to  continue  the  work  of  Set  III  and  to  give 
more  extended  business  practice.    A  partnership  is  introduced. 
Directions  and  Suggestions.    Observe  these  general  directions : 

1.  The  same  bound  books  are  used  as  in  Set  III. 

2.  Student  and  James  A.  Hart  are  represented  as  proprietors. 

3.  The  firm  name  is  to  be  Student  &  Hart. 

4.  Student  will  keep  the  books  and  manage  the  business. 

5.  Begin  a  new  page  in  the  cashbook,  the  journal,  the  check  book,  and 
the  sales  book. 

6.  Unless  otherwise  stated,  all  payments  are  to  be  made  hy  check.    Use 
a  new  envelope  for  the  bank  account. 

Different  selling  price  lists  may  be  used  if  the  instructor  so  desires.  The 
following  table  provides  twenty-five  such  lists : 


for  May  and  June 


12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

4.80 

4.84 

4.88 

4.92 

4.97 

5.02 

5.07 

5.12 

5.17 

4.77 

4.81 

4.85 

4.89 

4.93 

9.05 

9.09 

9.13 

9.17 

9.22 

9.27 

9.32 

9.37 

9.42 

9.02 

9.06 

9.10 

9.14 

9.18 

8.05 

8.09 

8.13 

8.17 

8.22 

8.27 

8.32 

8.37 

8.42 

8.02 

8.06 

8.10 

8.14 

8.18 

1.05 

1.09 

1.13 

1.17 

1.22 

1.27 

1.32 

1.37 

1.42 

1.02 

1.06 

1.10 

1.14 

1.18 

5.05 

5.09 

5.13 

5.17 

5.22 

5.27 

5.32 

5.37 

5.42 

5.02 

5.06 

5.10 

5.14 

5.18 

8.05 

8.09 

8.13 

8.17 

8.22 

8.27 

8.32 

8.37 

8.42 

8.02 

8.06 

8.10 

8.14 

8.18 

21.05 

21.09 

21.13 

21.17 

21.22 

21.27 

21.32 

21.37 

21.42 

21.02 

21.06 

21.10 

21.14 

21.18 

3.30 

3.34 

3.38 

3.42 

3.47 

3.52 

3.57 

3.62 

3.67 

3.27 

3.31 

3.35 

3.39 

3.43 

1.65 

1.69 

1.73 

1.77 

1.82 

1.87 

1.92 

1.97 

2.02 

1.62 

1.66 

1.70 

1.74 

1.78 

7.55 

7.59 

7.63 

7.67 

7.72 

7.77 

7.82 

7.87 

7.92 

7.52 

7.56 

7.60 

7.64 

7.68 

6.05 

6.09 

6.13 

6.17 

6.22 

6.27 

6.32 

6.37 

6.42 

6.02 

6.06 

6.10 

6.14 

6.18 

4.05 

4.09 

4.13 

4.17 

4.22 

4.27 

4.32 

4.37 

4.42 

4.02 

4.06 

4.10 

4.14 

4.18 

30.06 

30.09 

30.13 

30.17 

30.22 

30.27 

30.32 

30.37 

30.42 

30.02 

30.06 

30.10 

30.14 

30.18 

13.05 

13.09 

13.13 

13.17 

13.22 

13.27 

13.32 

13.37 

13.42 

13.02 

13.06 

13.10 

13.14 

13.18 

16.05 

16.09 

16.13 

16.17 

16.22 

16.27 

16.32 

16.37 

16.42 

16.02 

16.06 

16.10 

16.14 

16.18 

12.05 

12.09 

12.13 

12.17 

12.22 

12.27 

12.32 

12.37 

12.42 

12.02 

12.06 

12.10 

12.14 

12.18 

6.05 

6.09 

6.13 

6.17 

6.22 

6.27 

6.32 

6.37 

6.42 

6.02 

6.06 

6.10 

6.14 

6.18 

99 


100  BOOKKEEPING 


Incoming  Business  Forms  for  May 

Note.   Please  read  the  instructions  given  under  the  Incoming  Business  Forms  for 
March  and  apply  them  to  the  work  of  Set  IV. 

Form  1.  Invoice  of  Turner  &  Moss,  City,  May  2.    Terms:  cash. 

10  doz.  Carpenter's  Chisels  20  sets  Knives  and  Forks 

6  Copying  Presses  4  doz.  Mortise  Locks 

10  Grindstones  1  doz.  Planes,  #4 

3  doz.  Handsaws 

Form  2.  Bill  of  H.  L.  Mills,  City,  May  4.    Terms :  cash. 
Set  Office  Books,  |12  Stationery,  $3 

Form  3.  Invoice  of  Wilder  &  Chase,  City,  May  7.    Terms:  1/2  in  3  da., 
balance  in  10  da. 

8  doz.  Coal  Hods  5  doz.  Lanterns 

12  doz.  Door  Knobs  10  kegs  Nails 

15  doz.  Hammers  2  doz.  Planes,  #4 

10  Ice-cream  Freezers  5  doz.  Carpenter's  Chisels 

Form  4.  Invoice  of  Dunn  &  Sanford,  City,  May  9.    Terms:   10  da. 

10  doz.  Railroad  Picks  12  doz.  Steel  Axes 

6  doz.  Steelyards  20  doz.  Try-squares 

Form  5.  Check  of  Strong  &  Hunter,  City,  for  $117.75,  in  your  favor. 

May  11. 
Form  6.  Invoice  of  Turner  &  Moss,  City,  May  14.    Terms :  on  account. 

12  doz.  Carpenter's  Chisels  6  doz.  Hammers 

10  doz.  Coal  Hods  6  Ice-cream  Freezers 

15  Copying  Presses  6  doz.  Handsaws 

20  doz.  Door  Knobs  10  Grindstones 

10  sets  Knives  and  Forks 

Form  7.  Invoice  of  Wilder  &  Chase,  City,  May  16.    Terms :  on  account. 

10  doz.  Lanterns  10  kegs  Nails 

6  doz.  Mortise  Locks  6  doz.  Planes,  #4 

Form  8.  Invoice  of  Dunn  &  Sanford,  City,  May  20.    Terms :  1/30.  | 

10  doz.  Railroad  Picks  ,      6  doz.  Steel  Axes  ! 

6  doz.  Steelyards  10  doz.  Try-squares 

The  terms  given  mean  that  1%  will  be  taken  off  the  face  of  the  invoice  if  it  is  j 

paid  within  30  da. 


SET  IV.    GENERAL  HARDWARE 


mh 


Form   9.  Check  of  Strong  &  Hunter,  City,  for  $150,  in  your  favor.  May  23. 

Form  10.  Check  of  John  H.  Sand,  City,  for  |200,  in  your  favor.  May  30. 

In  Set  IV  all  merchandise  is  to  be  bought  at  the  following  prices : 


ARTICLE  AND  QUANTITY 

COST 

Carpenter's  Chisels,  ^-in 
Coal  Hods, 

,  doz 

u 

$3.75 
7.50 

Copying  Presses, 
Door  Knobs, 
Grindstones, 
Hammers, 
Handsaws, 
Ice-cream  Freezers, 
Knives  and  Forks, 

each 

doz 

each 

doz 

6.00 

.75 

3.75 

6.00 

18.00 

each 

set 

2.50 
1.25 

Lanterns, 
Mortise  Locks, 

doz 

6.00 
4.50 

Nails,  8d,  wire, 
Planes,  #4, 
Railroad  Picks,  9-lb., 

keg 

doz 

« 

3.00 
24.00 
10.00 

Steelyards, 
Steel  Axes, 

« 

12.00 

« 

9.00 

Try-squares,  6-in., 

<( 

4.50 

Memoranda  of  Transactions  for  May 

Mai/  1.  Student  and  James  A.  Hart  begin  a  General  Hardware  busi- 
ness, investing  cash,  $3000.    Each  partner  invests  |1500. 

Place  the  above  memorandum  in  the  journal,  hut  make  no  journal  entry.    Receive 
the  currency  from  the  instructor.   Make  the  following  entry  in  the  cashbook  : 


(ou^li^ei^^^^ 


1,  Deposit  all  currency  in  The  Union  Bank,  under  the  firm  name. 
In  the  pass  book,  above  the  student's  name,  write  the  firm  name.  Student  &  Hart. 


.;lt)2  BOOKKEEPING 

May  1.  You  have  entered  into  an  agreement  with  Wm.  H.  Kellogg 
for  the  rental  of  his  store,  at  266  Broad  Street,  at  $50  per  month. 

No  entry  is  required.  A  memorandum  of  this  agreement  may  be  made  and  filed 
with  the  incoming  papers. 

Engage  Henry  Lakey  as  a  clerk  at  |35  per  month. 

2.  Buy  of  Turner  &  Moss,  City,  for  cash,  merchandise  as  per  invoice, 
Form  1. 

Examine  and  check  the  invoice.  Write  a  check  in  payment.  Enter  in  the  pur- 
chase book  and  the  cashbook,  and  check  in  each. 

This  check  will  be  No.  1.  Now  that  you  are  engaged  in  a  partnership  business, 
checks  are  to  be  signed  with  the  Jirm  name. 

3.  Give  Wm.  H.  Kellogg  a  check  for  rent  of  the  store  for  May. 

4.  Buy  of  H.  L.  Mills,  City,  for  cash,  books  and  stationery,  as  per 
bill,  Form  2. 

Remember,  all  cash  payments  are  made  by  check  unless  otherwise  noted. 

5.  W.  D.  Mendon,  City,  places  an  order  for  the  following  goods. 
Fill  the  order  at  the  prices  given  herewith.    Terms :  cash. 

4  doz.  Carpenter's  Chisels  at  $4.75        1  doz.  Handsaws  at  $21 

3  Copying  Presses  at  $8  5  sets  Knives  and  Forks  at  $1.60 

4  Grindstones  at  $5  2  doz.  Mortise  Locks  at  $6 

Record  the  invoice  in  the  sales  book  and  the  cashbook,  and  check  in  each. 
Begin  a  new  page  in  the  sales  book. 

Receipt  the  invoice  and  receive  the  currency. 

6.  Hall  &  Son,  City,  place  an  order  for  the  following  goods.  Fill  the 
order.    Terms:  on  account. 

3  doz.  Carpenter's  Chisels  6  sets  Knives  and  Forks 
1  doz.  Planes,  #4                                      2  Copying  Presses 

7.  Buy  of  Wilder  &  Chase,  City,  merchandise  as  per  invoice.  Form  3. 
Terms;   1/2  in  3  da. ;  balance  in  10  da. 

7.  Deposit  currency,  $100. 

8.  Strong  &  Hunter,  City,  place  an  order  for  the  following  goods. 
Fill  the  order  at  the  prices  given  herewith.    Terms :  on  account. 

4  doz.  Coal  Hods  at  $9  6  doz.  Hammers  at  $8 

3  kegs  Nails  at  $4  3  Ice-cream  Freezers  at  $3.25 

5  doz.  Door  Knobs  at  $1  2  doz.  Lanterns  at  $7.50 

9.  Buy  of  Dunn  &  Sanford,  City,  at  10  da.,  merchandise  as  per 
invoice,  Form  4. 


SET  IV.    GENERAL  HARDWARE  103 

May  9.  Withdraw  by  check  f  15,  to  be  used  for  sundry  office  expenses. 

Write  this  check  to  the  order  of  Cash.  No  entry  is  required  because  no  cash  has 
been  paid  out.  Place  the  currency  in  the  Business  Cash  envelope.  This  is  called  a 
cash  check. 

10.   Remit  Wilder  &  Chase  a  check  for  one  half  the  invoice  of  May  7. 

If  there  is  a  half  cent  in  the  division,  call  it  one  cent ;  always  reckon  the  odd  cent 
on  the  first  transaction. 

10.  Pay  S.  H.  Lyman,  in  currency,  |5  for  cleaning  the  store  and 
basement. 

11.  Receive  of  Strong  &  Hunter  their  check  for  invoice  of  May  8, 
P^orm  5. 

Examine  the  check;  if  correct,  enter  the  amount  in  the  cashbook.  Place  the  check 
in  the  Business  Cash  envelope. 

12.  Give  each  partner  a  check  for  $50,  for  his  personal  use. 

Write  your  check  as  follows  :  Pay  to  the  order  of  Student. 
Make  your  partner's  check  payable  to  his  own  name. 
Sign  each  check  with  the  firm  name,  as  usual. 

Enter  in  the  cashbook  as  payments,  under  each  partner's  name  as  a  withdrawal. 
Place  the  currency  in  the  Personal  Cash  envelope. 

13.  L.  P.  Austin,  City,  places  an  order  for  the  following  goods.  Fill 
the  order.    Terms :  on  account. 

5  doz.  Railroad  Picks  5  doz.  Try-squares 

2  doz.  Steelyards  5  doz.  Hammers 

6  doz.  Steel  Axes  3  Ice-cream  Freezers 

14.  Buy  of  Turner  &  Moss,  City,  on  account,  merchandise  as  per 
invoice.  Form  6. 

Id.  Deposit  the  check  on  hand. 

15.  Wilson  &  Barton,  City,  place  an  order  for  the  following  goods. 
Fill  the  order.    Terms :  10  da. 

10  doz.  Door  Knobs  3  Ice-cream  Freezers 

3  doz.  Hammers  6  sets  Knives  and  Forks 
2  doz.  Handsaws                                  4  doz.  Carpenter's  Chisels 

16.  Buy  of  Wilder  &  Chase,  City,  on  account,  merchandise  as  per 
invoice,  Form  7. 

17.  Remit  Wilder  &  Chase  a  check  for  the  balance  of  the  invoice 
of  May  7. 

Note  the  amount  paid  on  this  invoice  on  May  10. 


104  BOOKKEEPING 

May  18.  John  Howe,  City,  places  an  order  for  the  following  goods. 
Fill  the  order  at  the  prices  given  herewith.    Terms:  cash. 

4  doz.  Lanterns  at  |7.50  5  kegs  Nails  at  $4 

3  doz.  Mortise  Locks  at  $6  3  doz.  Planes,  #4,  at  |30 

Record  in  the  sales  book  and  the  cashbook,  and  check  in  each. 

19.  Strong  &  Hunter,  City,  place  an  order  for  the  following  goods. 
Fill  the  order.    Terms :  on  account. 

6  doz.  Carpenter's  Chisels  8  doz.  Door  Knobs 

4  doz.  Coal  Hods  4  Grindstones 

5  Copying  Presses  3  doz.  Hammers 

3  doz.  Handsaws  5  sets  Knives  and  Forks 

20.  Buy  of  Dunn  &  Sanford,  City,  merchandise  as  per  invoice.  Form  8. 
Terms:  1/30. 

21.  Receive  of  L.  P.  Austin  cash,  on  the  invoice  sold  to  him  on 
May  13,  $100. 

AVrite  the  receipt  and  receive  the  currency. 

22.  John  H.  Sand,  City,  places  an  order  for  the  following  goods.   Fill 
the  order.    Terms:  on  account. 

6  doz.  Railroad  Picks  5  kegs  Nails 

5  doz.  Steelyards  6  Ice-cream  Freezers 

10  doz.  Try-squares  4  doz.  Lanterns 

3  Grindstones  6  doz.  Carpenter's  Chisels 

23.  Receive  of  Strong  &  Hunter  their  check  for  $150,  to  apply  on  the 
invoice  of  May  19,  Form  9. 

24.  Deposit  the  check  on  hand,  and  currency,  $200. 

Remember,  you  must  indorse  all  checks  that  you  deposit. 

24.  Remit  Dunn  &  Sanford  a  check  for  the  amount  of  the  invoice 
bought  of  them  on  May  9. 

25.  Receive  of  Wilson  &  Barton  cash,  for  the  amount  of  the  invoice 
sold  them  on  May  15. 

Remember  the  receipt. 

26.  Give  Wilder  &  Chase  your  note,  at  15  da.,  with  interest,  for  the 
invoice  of  May  16. 

Write  the  note  and  make  the  journal  entry.    The  invoice  should  be  receipted  as 
follows :  Paid  hy  note  at  15  da.,  Wilder  Sf  Chase. 


SET  IV.    GENERAL  HARDWAKE  105 

May  27.  P.  D.  Anson,  City,  places  an  order  for  the  following  goods. 
Fill  the  order.    Terms :  10  da. 

3  doz.  Coal  Hods  6  Grindstones 

5  Copying  Presses  ^  2  doz.  Hammers 

4  doz.  Door  Knobs  1  doz.  Handsaws 

27.  Give  Turner  &  Moss  a  check  for  one  half  of  the  invoice  bought 
of  them  on  May  14. 

28.  Receive  of  Hall  &  Son  cash,  to  apply  on  the  invoice  sold  them 
on  May  6,  $50. 

29.  L.  P.  Austin,  City,  places  an  order  for  the  following  goods.  Fill 
the  order  at  the  prices  given  herewith.    Terms ;  3/10,  ^^/30. 

4  sets  Knives  and  Forks  at  $1.60  3  doz.  Mortise  Locks  at  $6 

3  doz.  Lanterns  at  $7.50  4  kegs  Nails  at  |4 

29.  Wilson  &  Barton,  City,  place  an  order  for  the  following  goods. 
Fill  the  order.    Terms :  on  account. 

2  doz.  Planes,  #4  2  doz.  Steelyards 

4  doz.  Railroad  Picks  4  doz.  Steel  Axes 

30.  Receive  of  John  H.  Sand  his  check  to  apply  on  account,  $200, 
Form  10. 

31.  Deposit  the  check  and  all  currency  on  hand. 

31.  Give  Henry  Lakey,  your  clerk,  a  check  for  his  salary,  $35. 

Make  the  monthly  bank  statement. 

Before  closing  the  different  books,  hand  them  to  the  instructor  for 
inspection  and  approval. 

Record  the  following  in  the  journal,  in  the  usual  form,  at  the  cost 
price  : 

Inventories,  May  31,  19 — 
Merchandise : 

4  doz.  Carpenter's  Chisels  2  doz.  Lanterns 

7  doz.  Coal  Hods  2  doz.  Mortise  Locks 

6  Copying  Presses  3  kegs  Nails 

6  doz.  Door  Knobs  3  doz.  Planes,  #4 

4  Grindstones  5  doz.  Railroad  Picks 

3  doz.  Hammers  3  doz.  Steelyards 

2  doz.  Handsaws  8  doz.  Steel  Axes 

2  Ice-cream  Freezers  15  doz.  Try-squares 

4  sets  Knives  and  Forks 
Expense : 

Office  Books  and  Stationery  $12 


106 


BOOKKEEPIKG 


Closing  the  Work  for  May 

Look  over  the  closing  of  each  book  in  April,  and  then  close  the  books. 
Post  to  the  ledger,  beginning  on  a  new  page ;  allow  one  third  of  a 
page  for  each  account. 

There  are  iiuo  proprietors  in  this  set ;  their  accounts  should  be  on  the  first  page 
of  the  ledger. 

Foot  the  ledger  accounts. 

Take  a  trial  balance ;  after  approval,  record  it  in  Blank  No.  1,  on  the 
page  indicated  by  the  index. 

Make  the  usual  statements,  and  the  verification ;  after  approval,  record 
them  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 

Close- the  ledger  as  follows: 

1.  Close  the  Merchandise  and  Expense  accounts  to  the  Loss  and  Grain 
account. 

2.  As  there  are  two  proprietors  in  this  set,  divide  the  gain  equally 
between  them,  and  close  the  Loss  and  Gain  account  as  shown  in  the 
following  model: 


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3/.  i^ilg^e^t^Tle^'Sk^  ^ 


3/ 


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zg2M 


^ 


3/    ^9^10^6^ 


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11 


Take  a  second  trial  balance. 
Submit  all  work  to  the  instructor  for  approval. 

After  receiving  your  monthly  bank  statement,  check  the  stubs  of 
your  check  book. 

EXERCISE  47         <p/^^^ 
A  Written  Review 

The  following  review  exercises  are  suggested : 
«.  Journalize  orally  or  in  writing  each  transaction  in  May. 
h.  On  loose  sheets  of  paper  write  Set  I,  page  41,  as  follows :  Enter 
all  cash  items  in  the  cashbook ;  journalize  all  other  items ;  post  to  the 
ledger,  three  accounts  to  the  page ;  take  a  trial  balance ;  make  the  usual 
statements ;  close  the  ledger  \  take  a  second  trial  balance. 


SET  IV.   GENERAL  HARDWARE  BUSINESS 

WORK  FOR  JUNE 

The  following  memoranda  are  a  continuation  of  the  memoranda  for 
May,  representing  a  partnership  business. 

Directions  and  Suggestions.  The  following  general  directions  should 
be  observed: 

1.  Use  the  same  price  list  and  the  same  books  as  in  May. 

2.  Begin  a  new  page  in  the  journal.  In  the  sales  book  leave  a  space  of 
three  lines,  then  write  the  first  sale  in  June  under  the  last  sale  in  May. 

3.  The  balance  brought  down  from  the  May  cashbook,  under  June  1, 
is  to  be  reckoned  with  the  cash  receipts  in  June.  Use  a  new  envelope 
for  the  bank  account.  Record  the  balance  at  the  head  of  the  deposit 
column. 

Incoming  Business  Forms  for  June 

Form  11.  Invoice  of  Wilder  &  Chase,  City,  June  3.    Terms:   2/10,  n/30. 

6  doz.  Carpenter's  Chisels  5  doz.  Hammers 

10  doz.  Door  Knobs  6  doz.  Handsaws 

6  Grindstones 

Form  12.  Invoice  of  Dunn  &  Sanford,  City,  June  5.    Terms :  on  account. 

6  Ice-cream  Freezers  10  doz.  Mortise  Locks 

12  sets  Knives  and  Forks  20  kegs  Nails 

10  doz.  Lanterns  6  doz.  Planes,  #4 

Form  13.  Check  of  Arnold  &  Davis,  City,  for  $100,  in  your  favor,  June  5. 
Form  14.  Note  of  P.  D.  Anson,  City,  for  |100,  in  your  favor,  at  10  da., 

with  interest,  June  6. 
Form  15.  Bill  of  H.  L.  Mills,  City,  June  9.    Terms :  cash. 

Office  Stationery,  |6.75 

Form  16.  Invoice  of  Turner  &  Moss,  City,  June  12.    Terms:  1/2  cash; 
balance  in  30  da. 

10  doz.  Carpenter's  Chisels  6  Grindstones 

6  doz.  Coal  Hods  6  doz.  Hammers 

6  Copying  Presses  5  doz.  Handsaws 

6  doz.  Door  Knobs 

Form  17.  Check  of  L.  P.  Austin,  City,  for  $71.50,  in  your  favor,  June  14. 

107 


108  BOOKKEEPING 

Form  18.  Invoice  of  Wilder  &  Chase,  City,  June  15.    Terms :  1/2  cash  ; 
balance  in  30  da. 

6  Ice-cream  Freezers  12  doz.  Mortise  Locks 

10  sets  Knives  and  Forks  20  kegs  Nails 

6  doz.  Lanterns  5  doz.  Planes,  #4 

Form  19.  Invoice  of  Turner  &  Moss,  City,  June  21.    Terms :  1/2  cash ; 
balance  in  10  da. 

12  doz.  Raih'oad  Picks  6  doz.  Steel  Axes 

8  doz.  Steelyards  10  doz.  Try-squares 

Form  20.  Check  of  P.  D.  Anson,  City,  for  $100,  in  your  favor,  June  25. 

Memoranda  of  Transactions  for  June 

June  1.  Give  Wm.  H.  Kellogg  a  check  for  rent  of  the  store  for 
June,  150. 

2.  Receive  of  Hall  &  Son  cash  for  the  balance  of  the  invoice  of 
May  6. 

2.  Give  Turner  &  Moss  your  note  at  15  da.  for  the  balance  of  the 
invoice  of  May  14. 

3.  Buy  of  Wilder  &  Chase,  City,  merchandise  as  per  invoice.  Form  11. 
Terms :  2/10,  n/^O. 

4.  Hall  &  Son,  City,  place  an  order  for  the  following  goods.  Fill 
the  order.    Terms :  30  da. 

4  doz.  Coal  Hods  3  doz.  Carpenter's  Chisels 

2  Copying  Presses  3  doz.  Hammers 

3  doz.  Handsaws  5  doz.  Try-squares 

5.  Buy  of  Dunn  &  Sanford,  City,  on  account,  merchandise  as  per 
invoice.  Form  12. 

5.  Arnold  &  Davis,  City,  place  an  order  for  the  following  goods. 
Fill  the  order  at  the  prices  given  herewith.  Terms:  cash,  $100 ;  balance 
in  15  da. 

3  Ice-cream  Freezers  at  f  3.25  5  doz.  Lanterns  at  |7.50 

3  doz.  Try-squares  at  |6  6  doz.  Mortise  Locks  at  $6 

8  sets  Knives  and  Forks  at  $1.60  2  doz.  Planes,  #4,  at  $30 

Enter  in  the  sales  book.  Receive  their  check  for  $100,  Form  13,  and  enter  it  in 
the  cashbook.  Do  not  check  in  either  book.  Why  ?  Under  what  name  is  the  check 
entered  ? 

6.  Receive  of  L.  P.  Austin  cash  for  the  balance  of  the  invoice  of 
May  13. 


SET  IV.    GENERAL  HARDWARE  109 

June  6,  Receive  of  P.  D.  Anson  his  note  at  10  da.,  with  interest, 
Form  14. 

Do  not  make  any  entry  for  the  interest. 

6.  Receive  of  Strong  &  Hunter  cash  for  the  balance  of  the  invoice 
of  May  19. 

6.  Deposit  the  check  on  hand,  and  currency,  $200. 

8,  Receive  of  L.  P.  Austin  cash  for  the  invoice  of  May  29,  less  3%. 

The  allowance  of  3%  on  this  invoice  for  early  payment  is  called  Merchandise  Dis- 
count.  Such  allowances  are  common  in  business. 

Enter  in  the  cashbook  in  this  set,  as  follows : 


Receipts 
L.  P.  Austin,  Inv.  5/29        $62.90 


Payments 
Mdse. Disc, Inv.  5/29, less  3 %  $1.89 


It  is  very  convenient  to  write  dates  in  fractional  form.    5/29  means  the  5th  month 
and  29th  day,  — May  29. 

8.  Give  Dunn  &  Sanford  a  check  for  the  invoice  of  May  20,  less  1%. 

9.  Pay  the  bill  of  H.  L.  Mills  by  check  for  office  stationery.  Form  15. 

10.  Give  Wilder  &  Chase  a  check  for  your  note,  in  their  favor,  due 
to-day,  with  interest. 

11.  Strong  &  Hunter,  City,  place  an  order  for  the  following  goods. 
Fill  the  order.    Terms:  15  da. 

5  doz.  Door  Knobs  2  doz.  Handsaws 

3  Grindstones  6  kegs  Nails 

2  doz.  Hammers  4  doz.  Try-squares 

12.  Buy  of  Turner  &  Moss,  City,  merchandise  as  per  invoice.  Form  16. 
Terms :  1/2  cash  ;  balance  in  30  da. 

Enter  the  entire  amount  in  the  purchase  book.  Remember  the  check. 

13.  Give  Wilder  &  Chase  a  check  for  the  amount  of  the  invoice  of 
June  3,  less  2%. 

13.  Give  each  partner  a  check  for  $50,  for  personal  use. 

Sign  each  check  with  the  firm  name. 

14.  L.  P.  Austin,  City,  places  an  order  for  the  following  goods.    Fill 
the  order  at  the  prices  given  herewith.  Terms :  1/2  cash ;  balance  in  30  da. 

4  doz.  Carpenter's  Chisels  at  |4.75         2  Grindstones  at  |5 

3  Copying  Presses  at  $8  3  doz.  Hammers  at  |8 

3  doz.  Door  Knobs  at  |1  3  doz.  Handsaws  at  $21 

Enter  the  invoice  in  the  sales  book.   Receive  a  check  for  one  half  the  amount. 
Form  17. 


110  BOOKKEEPIKG 

June  15.  Buy  of  Wilder  &  Chase,  City,  merchandise  as  per  invoice. 
Form  18.    Terms :  1/2  cash ;  balance  in  30  da. 

16,  Receive  of  P.  D.  Anson  cash  for  his  note  and  interest  due  to-day. 

Compute  the  interest  on  the  note  and  receive  the  currency.  Remember,  there  are 
two  entries  in  the  cashbook.    What  titles  will  be  used  ? 

16.  Deposit  the  check  on  hand,  and  currency,  $200. 

17.  Give  Turner  &  Moss  a  check  for  your  note,  in  their  favor,  due  to-day. 
19.  V.  M.  Furnham,  City,  places  an  order  for  the  following  goods. 

Fill  the  order  at  the  prices  given  herewith.    Terms :  cash. 

6  kegs  Nails  at  $4  2  doz.  Railroad  Picks  at  $13 

W.  Receive  of  Arnold  &  Davis  cash  for  the  balance  of  the  invoice 
of  June  5. 

21.  Buy  of  Turner  &  Moss,  City,  merchandise  as  per  invoice,  Form  19. 
Terms:  1/2  cash;  balance  in  10  da. 

22.  Wilson  &  Barton,  City,  place  an  order  for  the  following  goods. 
Fill  the  order.    Terms:  cash,  |75;  balance  in  10  da. 

5  doz.  Carpenter's  Chisels  5  Grindstones 

3  doz.  Coal  Hods  3  doz.  Hammers 

4  doz.  Door  Knobs  2  doz.  Handsaws 

22.  Deposit  currency,  $175. 

2S.  Give  Dunn  &;  Sanford  your  note  at  30  da.,  to  apply  on  account, 
♦200. 

24.  Jolm  H.  Sand,  City,  places  an  order  for  the  following  goods.    Fill 
the  order.    Terms:  cash,  |150;  balance  in  30  da. 

6  Ice-cream  Freezers  6  doz.  Mortise  Locks 
8  sets  Knives  and  Forks                        10  kegs  Nails 

5  doz.  Lanterns  3  doz.  Planes,  #4 

25.  P.  D.  Anson,  City,  places  an  order  for  the  following  goods.    Fill 
the  order.    Terms :  cash,  $100 ;  balance  in  10  da. 

5  doz.  Railroad  Picks  4  doz.  Steel  Axes 

5  doz.  Steelyards  3  doz.  Try-squares 

Receive  his  check  for  $100,  Form  20. 

26.  Receive  of  Strong  &  Hunter  cash,  for  the  invoice  of  June  11. 

26,  Deposit  the  check  on  hand,  and  currency,  $250. 

27.  Strong  &  Hunter,  City,  'place  an  order  for  the  following  goods. 
Fill  the  order.    Terms :  10  da. 

3  doz.  Railroad  Picks  4  doz.  Try-squares 

10  kegs  Nails  2  doz.  Steel  Axes 


SET  IV.    GENERAL  HARDWARE  111 

June  28.  Henry  Zaner,  City,  places  an  order  for  the  following  goods. 
Fill  the  order  at  the  price  given  herewith.    Terms :  cash. 

6  kegs  Nails  at  $4 

29,  Prepay  your  note  in  favor  of  Dunn  &  Sanford,  issued  on  June  23, 
by  giving  them  a  check  for  the  net  proceeds. 

A  corresponding  transaction  is  fully  explained  under  April  28. 

29,  Hall  &  Son,  City,  place  an  order  for  the  following  goods.  Fill  the 
order.    Terms :  on  account. 

2  Copying  Presses  3  Ice-cream  Freezers 

3  Grindstones  2  doz.  Handsaw.s 

SO,  Give  Henry  Lakey,  your  clerk,  a  check  for  his  salary,  $35. 

30,  Deposit  all  currency  on  hand. 

30,  Withdraw,  by  check,  the  balance  on  deposit  in  The  Union  Bank. 

Write  the  check  payable  to  the  order  of  Cash.  The  reasons  for  this  withdrawal 
were  given  at  the  close  of  April.    No  entry  is  required. 

Make  the  monthly  bank  statement. 

Hand  all  books  to  the  instructor  for  inspection  and  approval. 

Record  the  following  in  the  journal,  in  the  usual  form,  at  the  cost  price: 

Inventories,  June  30,  19 — 
Merchandise : 

8  doz.  Carpenter's  Chisels  8  doz.  Lanterns 

6  doz.  Coal  Hods  12  doz.  Mortise  Locks 

5  Copying  Presses  5  kegs  Nails 

9  doz.  Door  Knobs  -  9  doz.  Planes,  #4 

3  Grindstones  7  doz.  Railroad  Picks 

3  doz.  Hammers  6  doz.  Steelyards 

1  doz.  Handsaws  8  doz.  Steel  Axes 

2  Ice-cream  Freezers  6  doz.  Try-squares 

10  Sets  Knives  and  Forks 
Expense : 
Office  Books  and  Stationery  $12.50 

Closing  the  Wokk  for  June 

Close  the  different  books. 

May  and  June  constitute  one  set  of  books;  therefore  the  work  for 
June  will  be  posted  to  the  same  accounts  as  that  for  May. 

Foot  the  ledger  accounts. 

Take  a  trial  balance ;  after  approval,  record  it  in  Blank  No.  1,  on  the 
page  indicated  by  the  index. 


112  BOOKKEEPING 

Make  the  usual  statements,  and  the  verification ;  after  approval,  record 
them  in  Blank  No.  1,  on  the  page  indicated  by  the  index. 
Open  a  ncAv  Loss  and  Gain  account ;  close  the  ledger. 

Refer  to  the  Loss  and  Gain  account  in  May  for  a  suggestion  as  to  the  proper 
division  of  the  gain  between  the  partners. 

Take  a  second  trial  balance. 
Submit  all  work  to  the  instructor  for  approval. 

After  receiving  your  monthly  bank  statement,  check  the  stubs  of 
your  check  book. 

EXERCISE  48      ^^     \.\aA'  >  >^  ^ 

A  Written  Review 

The  following  review  exercises  are  suggested : 
^  1.  Journalize  orally  or  in  writing  each  transaction  in  June. 

2.  On  loose  sheets  of  paper  write  Set  II,  page  51,  as  follows :  Use  the 
cashbook,  the  journal,  the  purchase  book,  the  sales  book,  and  the  ledger. 
Complete  the  set  in  every  detail  and  pass  it  to  the  instructor. 

3.  The  following  written  test  in  business  forms :  Write  from  memory 
on  blank  paper,  cut  to  the  proper  size,  the  following  business  forms; 
make  the  entry  for  each  party. 

a,  A  Promissory  Note.  May  27,  Student  gives  Henry  S.  Miller  a  30-day 
promissory  note,  bearing  interest  at  6%,  payable  at  Second  National  bank. 
Face  of  the  note,  $237.50. 

h.  A  Promissory  Note.  June  16,  Student  receives  of  Adam  H.  Free- 
man a  60-day  promissory  note,  without  interest,  payable  at  Union 
National  Bank.    Face  of  the  note,  |348.20. 

c.  A  Check.  On  May  15,  Student  receives  of  Howard  &  Co.  a  check 
drawn  on  the  City  National  Bank  for  |88.40. 


EXERCISE  49  k  c^ 

SET  G.   GRAIN 

This  set  is  given  as  an  optional  review  set,  or  it  may  be  used  for 
additional  work  by  those  students  who  finish  the  regular  sets  in  advance 
of  the  class. 

The  books  used  are  the  journal,  the  cashbook,  the  sales  book,  the  pur- 
chase book,  and  the  ledger.  Loose  sheets  of  journal  paper  and  ledger 
paper  should  be  used  for  recording  the  transactions.  Allow  one  third 
of  a  page  for  each  account  in  the  ledger. 


A  REVIEW  SET  113 

Memoranda  of  Transactions 

June  1.  Student  and  Wm.  G.  Allston  begin  the  Grain  and  Seed  busi- 
ness, investing  cash,  |2000.    Each  partner  invests  $1000. 

2,  Pay  Edward  S.  Green  by  check,  for  rent  of  the  store  for  1  mo.,  $50. 
•5.  Buy  of  Wm.  S.  Duncan  by  check : 

500  bu.  Wheat  at  90^  600  bu.  Corn  at  43^ 

4.  Sell  Harvey  &  Co.  for  cash : 

200  bu.  Wheat  at  $1.10  150  bu.  Corn  at  50^ 

6,  Buy  of  E.  S.  Harlan  on  account : 

1000  bu.  Oats  at  32(^ 

6.  Pay  T.  J.  Coleman  by  check,  for  a  set  of  office  books,  stationery, 
and  supplies,  $22.50. 

G.  Sell  Graves  &  Co.  on  account : 

250  bu.  Corn  at  51(^  400  bu.  Oats  at  ^^ 

8.  Pay  E.  S.  Harlan  by  check,  on  account,  $200. 

9,  Buy  of  Richard  F.  Goodman  on  account : 

500  bu.  Corn  at  44(^ 

10.  Sell  Henry  P.  Button  on  account : 

150  bu.  Wheat  at  $1.12  100  bu.  Corn  at  50<^ 

200  bu.  Oats  at  ^^ 

11.  Buy  of  S.  M.  Collins  by  check : 

400  bu.  Wheat  at  92(^  * 

12.  Pay  Reading  &  Co.  by  check,  for  an  office  safe,  $75. 

13.  Student  withdraws  cash,  for  personal  use,  $50. 

13.  Wm.  G.  Allston  withdraws  cash,  for  personal  use,  $50. 

15.  Give  E.  S.  Harlan  your  note,  with  interest,  at  10  da.,  $120. 

16.  Receive  of  Graves  &  Co.  their  check,  on  invoice  of  June  6,  for  $175. 

17.  Give  Richard  S.  Goodman  your  check  for  the  invoice  of  June  9. 

18.  Receive  of  Henry  P.  Button  his  check  for  the  invoice  of  June  10. 

19.  Sell  Kelsey  &  Co.  on  account: 

200  bu.  Wheat  at  $1.15  100  bu.  Corn  at  50^ 

200  bu.  Oats  at  37^*^ 

20.  Receive  of  Graves  &  Co.  their  check  for  the  balance  of  the  invoice 
of  June  6. 


114  BOOKKEEPIKG 

June  22.  Sell  Graves  &  Co.  on  account,  2%,  10  da. : 

200  bu.  Wheat  at  $1.10  200  bu.  Corn  at  50^ 

100  bu.  Oats  at  38(^ 

23.  Buy  of  Geo.  M.  Barber  on  account : 

500  bu.  Oats  at  33^ 

24.  Sell  Henry  P.  Dutton  on  account : 

60  bu.  Wheat  at  $1.12  200  bu.  Oats  at  39(^ 

25.  Pay  E.  S.  Harlan  by  check  for  your  note  and  interest  due  to-day. 

26.  Receive  of  Graves  &  Co.  their  check  for  the  invoice  of  June  22, 
less  2%. 

27.  Pay  Geo.  M.  Barber  by  check,  on  account,  |100. 
27'  Buy  of  E.  S.  Harlan  on  account : 

300  bu.  Wheat  at  91(^ 

29.  Receive  of  Henry  P.  Dutton  his  check,  on  account,  $75. 

30.  Receive  of  Kelsey  &  Co.  their  note,  with  interest,  at  30  da.,  $250. 
30.  Pay  Fred  A.  Walker,  your  clerk,  by  check,  one  month's  salary, 

$30. 

Inventories,  June  30,  19 — 
Merchandise : 

400  bu.  Wheat  at  90^ 
300  bu.  Corn  at  43^ 
400  bu.  Oats  at  320 

Expense  ^ 

Office  Books  and  Stationery,  $20 
Office  Safe  at  Cost 


EXERCISE  50 

CONSIGNMENTS 

A  fruit  grower  in  Oregon  may  send  a  quantity  of  apples  to  a  merchant 
in  New  York,  who  will  act  as  agent  in  selling  the  apples.  This  agent  is 
called  a  Commission  Merchant. 

The  quantity  of  apples  received  is  called  the  Consignment ;  the  one  who 
sent  the  apples,  the  Consignor;  the  commission  merchant  who  received 
them,  the  Consignee ;  the  itemized  statement  sent  by  the  consignee  to  the 
consignor,  the  Account  of  Sales. 


CONSIGNMENTS  115 

After  the  apples  are  sold,  the  merchant  deducts  a  certain  per  cent  of 
the  sales  as  his  Commission,  pays  all  the  other  charges,  and  remits  the 
balance. 

The  following  transactions  afford  illustrations  of  the  application  of 
debit  and  credit  to  this  kind  of  business.    Journalize  each  transaction. 


Memoranda 

July  1,  Henry  Brown,  a  commission  merchant  of  New  York,  received 
a  consignment  of  pineapples  from  the  Day  Porto  Rican  Fruit  Company, 
Manati,  Porto  Rico,  by  the  steamer  Coamo,  to  be  sold,  on  their  account 
and  risk,  as  follows : 

100  crates  36's  100  crates  30's 

100  crates  24's  100  crates  18's 

No  debit  and  no  credit  entry  for  this,  simply  a  memorandum. 
36's,  24's,  etc.,  set  forth  the  number  of  pineapples  in  each  crate,  and  indicate  the 
size  of  the  fruit. 

2.  The  freight  charges,  |0.482  per  crate,  wer'e  paid  by  check  to  the 
New  York  &  Porto  Rican  Steamship  Company. 

Charge  the  Day  Porto  Rican  Fruit  Company  for  the  amount  of  this  check. 

S,  Upon  examination  it  was  found  that  some  of  the  fruit  was  damaged, 
and  the  entire  shipment  was  repacked  at  a  charge  of  2^  per  crate.  The 
following  were  the  losses : 

3  crates  36's  2  crates  30's 

2  crates  24's    "  1  crate  18's 

Charge  the  Company  and  credit  Labor. 
The  charge  is  for  the  total  number  of  crates. 

4,  Sold  H.  B.  Smith  on  account : 

50  crates  36's  at  $2.90  60  crates  24's  at  $3.25 

5,  Sold  J.  B.  Conley  for  cash,  less  2%  : 

47  crates  36's  at  $2.90  50  crates  30's  at  $3.10 
Charge  the  net  amount. 

6,  Sold  C.  H.  White  on  account : 

48  crates  30's  at  $3.15  50  crates  18's  at  $3.60 

7,  Sold  P.  C.  Wilson  for  cash : 

48  crates  24's  at  $3.20  49  crates  18's  at  $3.50 


116  BOOKKEEPING 

July  8,  The  company  is  charged  for  the  following  items : 
Labor,  |4 ;  cartage,  2(f,  per  crate;  commission,  IO70  on  the  sales. 
Credit  the  accounts  named. 

9.  A  check  is  remitted  for  the  net  amount  due  the  Day  Porto  Rican 
Fruit  Company.    Make  the  necessary  entry  for  this  remittance. 


COMMERCIAL  DRAFTS 

Note.  A  brief  study  of  the  commercial  sight  draft  and  the  bank  draft  is  introduced 
at  this  stage  of  the  student's  work  for  the  convenience  and  accommodation  of  those 
instructors  who  desire  to  take  up  the  study  of  drafts,  in  a  brief  way,  in  connection  with 
the  introductory  work  of  the  text. 

Study  the  following  illustration,  giving  particular  attention  to  the 
relation  that  the  different  parties  bear  to  each  other. 

Chas.  H.  Hardy,  Hartford,  Conn.,  owes  Geo.  H.  Allen,  Chicago,  111., 
|500.  Amos  R.  Graham,  Chicago,  111.,  owes  Chas.  H.  Hardy  the  same 
amount.  What  may  Chas.  H.  Hardy  do  to  serve  his  own  convenience, 
and  at  the  same  time  save  Amos  R.  Graham  the  trouble  of  sending  the 
money  from  Chicago  to  Hartford  ? 

Chas.  H.  Hardy  writes  an  order  directing  Amos  B..  Graham  to  pay  Geo.  H.  Allen 
$500.  Allen  presents  the  order  to  Graham,  and  he  pays  it  in  cash.  Does  this 
accomplish  the  same  result  as  if  Graham  had  sent  the  money  to  Hardy,  and  Hardy 
had  sent  it  to  Allen  ? 

Whom  should  Chas.  H.  Hardy  debit?   Whom  should  he  credit? 

Whom  should  Geo.  H.Allen  credit?   What  should  he  debit? 

Whom  should  Amos  R.  Graham  debit  ?  What  should  he  credit  ? 

A  Commercial  Draft  is  a  written  order  in  which  one  person  directs  another 
to  pay  a  specified  sum  of  money  to  the  order  of  himself,  or  to  the  order 
of  a  third  person. 

The  primary  object  of  commercial  drafts  is  to  effect  the  settlement  of 
debts  without  the  risk  or  the  inconvenience  of  transmitting  money. 
There  may  be  either  three  parties  or  two  parties  to  a  draft. 
The  Original  Parties  to  a  three-party  draft  are : 
The  Drawer,  the  one  who  draws  the  draft ; 
The  Drawee,  the  one  on  whom  the  draft  is  drawn. 
The  Payee,  the  one  to  whom  the  order  is  made  payable. 

Many  commercial  drafts  are  drawn  as  a  means  of  collecting  debts,  and  a  large 
number  of  them  are  dishonored.  Unless  there  is  a  special  reason,  such  as  dealing 
with  a  delinquent  debtor,  a  draft  should  not  be  drawn  without  a  previous  arrange- 
ment or  an  understanding  between  the  persons.  Without  such  notice,  a  draft  ordi- 
narily has  no  more  significance  than  the  sending  of  a  monthly  statement  of  account. 


COMMERCIAL  DRAFTS 


117 


Sight  Paper  is  paper  payable  on  presentation. 
The  following  is  the  usual  form  of  a  sight  draft. 

Sight  Draft 


d^^-d^^^^^^^^  — —  —^ay  to  the  order  of 


-^^3.^ 


S=Z± 


r 


U.^i<<^ 


^::n4^.^f^.''nrCt^.,^  \ 


/Dollars 


Value  received  and  charge  to  account  of 
'tNlo..z^  T>ue      -^A^. 


P>4^^i  ^^<^^^y^-^^ 


study  this  sight  draft  in  connection  with  the  following  diagram : 

C.  W.  Gray,  payee 
Springfield 


F.  C.  Gorham,  drawee, 
Springfield 


Mason  &  Young,  drawers 
Boston 


The  persons  to  a  three-party  commercial  draft  usually  bear  the  follow- 
ing relation  to  each  other : 

The  Drawee  generally  owes  the  drawer; 

The  Drawer  generally  owes  the  payee ; 

The  Payee  and  the  drawee  bear  no  relation  to  each  other. 
The  drawee  and  the  payee  usually  live  in  the  same  place. 

While  not  bound  to  do  so,  the  drawer  usually  notifies  the  drawee  before  or  at  the 
time  of  drawing  the  draft. 

It  is  customary  to  send  it  to  the  payee,  and  he  presents  it  to  the  drawee. 


118 


BOOKKEEPING 


The  Drawer's  Entry.    Mason  &  Young  mail  the  following  draft  to 
C.  W.  Gray,  and  make  this  journal  entry : 


Mason  &  Young's  Journal 


Z^.'tZ^ 


i^-T-Z^ 


iZyOO^ 


S(?0 


S^(? 


Mason  &  Young  have  given  C.  W.  Gray  an  order  equivalent  to  $500  cash,  when 
presented  to  Gorham ;  therefore  they  should  debit  Gray. 

When  F.  C.  Gorham  pays  the  sight  draft,  he  gets  out  of  Mason  &  Young's  debt, 
$500.  He  gave  the  money  to  Gray,  but /or  tlie  account  of  Mason  8^  Young ;  therefore 
Mason  &  Young  will  credit  F.  C.  Gorham. 

The  Payee's  Entry.  Immediately  upon  the  receipt  of  this  draft  Gray 
will  take  it  to  F.  C.  Gorham  and  receive  the  cash,  or  deposit  it  in  his 
bank  for  collection  and  credit.  Gray  will  get  the  cash,  $500 ;  he  will 
make  this  cashbook  entry  on  the  left  side: 

Gray's  Cashbook 


.x'i^^.^i^-^^^zyK  ^:W<>:?^^-  <:z^l-a^A^a^Uz^/^tP'^ 


SOO 


The  cash  received  by  Gray  came  from  Mason  &  Young  through  Gorham ;  there- 
fore Gray  should  credit  Mason  Sj-  Young. 

The  Drawee's  Entry.   When  the  draft  is  presented  to  Gorham,  he  will 
pay  it,  and  make  this  cashbook  entry  on  the  right  side : 

Gorham' s  Cashbook 


j-^^ 


Gorham  paid  Gray  $500,  but  he  paid  one  of  his  debts  to  Mason  &  Young,  and 
thus  got  out  of  their  debt ;  therefore  he  should  debit  them. 

The  three-party  draft  is  not  used  so  frequently  as  formerly. 

The  Two-Party  Draft;  its  General  Uses.  Business  men  frequently 
employ  the  sight  draft  as  an  aid  in  the  collection  of  accounts  that  are 
past  due.    For  example,  suppose  Edgar  McMickle,  Paterson,  N.J.,  owes 


COMMERCIAL  DRAFTS 


119 


Wilbert,  Closs  &  Co.,  Springfield,  Mass.,  |260.50.  The  account  is  past 
due,  and  Wilbert,  Closs  &  Co.  want  the  money.  They  will,  after  proper 
notice,  draw  the  following  draft : 


%  2.(^(7 


:^ -.c^^^^ 


^ 


J^^^^2^^^^ 


'a.<i^.,,^^^ ,  9, 1 9  — 


^ — r 

=JPay  to  the  order  of 


■■Y^.<1^^t^^/^.r<^.. 


^:^T4/.^^g^^^g?^.^r^--??7^^  ^ 


/Dollars 


Value  received  and  charge  to  account  of 
^o..AI^T>ue.  ^ 


^^yi'/i^^r^^.^^J^^ 


Wilbert,  Closs  &  Co.  will  indorse  the  draft  and  leave  it  with  the 
Springfield  National  Bank  for  collection.  As  they  have  no  account  with 
a  Paterson  bank,  they  will  again  indorse  the  draft  and  forward  it  to  the 
Chemical  National  Bank  of  New  York  City,  with  whom  they  have  a 
regular  account.  The  following  indorsements  will  appear  on  the  back 
of  the  draft. 


The  blank  indorsement,  simply  the  name,  is  but  little  used  in  business.  Banks 
insist  on  the  use  of  the  full  indorsement. 

A  number  of  indorsements  that  are  common  in  business  are  illustrated  and 
explained  on  page  90. 

The  Chemical  National  Bank  will  collect  the  money  from  McMickle 
through  a  bank  in  Paterson,  and  then  notify  the  Springfield  National 
Bank  that  the  draft  has  been  collected  and  the  amount  credited.  The 
Springfield  National  Bank  notifies  Wilbert,  Closs  &  Co.  that  the  pro- 
ceeds have  been  credited. 


120 


BOOKKEEPING 


The  following  are  the  entries  for  this  draft : 

The  Drawer's  Entry.    Wilbert,  Gloss  &  Co.  make  this  entry  on  the 
left  side  of  their  cashbook : 


Wilbert,  Closs  &  Co.'s  Cashbook 


1^0 


sol 


Should  the  bank  make  a  charge  for  collecting  this  draft,  the  amount  of  such 
a  charge  would  appear  on  the  right  side  of  the  above  cashbook. 

The  Drawee's  Entry.    When  Edgar  McMickle  pays  the  draft,  he  will 
debit  Wilbert,  Closs  &  Co.  on  the  right  side  of  his  cashbook,  as  follows : 

McMickle' s  Cashbook 


iCo  SO 


From  the  preceding  discussion  the  following  principles  are  deduced 
regarding  the  entries  for  commercial  sight  drafts : 

Drawer's  Entry  when  a  three-party  sight  draft  is  drawn : 
Payee  Drawee 

Drawer's  Entry  when  he  draws  a  sight  draft  in  his  own  favor,  and  it  is 

collected:  /-,    i  t-^ 

Cash  Drawee 

Payee's  Entry  when  he  receives  a  sight  draft  and  collects  it,  on  account : 

Cash  Drawer 

Drawee's  Entry  when  he  pays  a  sight  draft : 

Drawer  Cash 


EXERCISE  51 
WRITING  DRAFTS 

Write  each  of  the  following  drafts,  at  sight,  and  make  the  entry  for 
each  party.  Use  the  current  date.  The  following  script  model  shows  an 
orderly  arrangement  of  the  work. 

It  is  suggested  that  the  students  rule  ordinary  sheets  of  writing  paper  to  corre- 
spond to  the  model  on  page  121,  and  use  them  when  writing  the  drafts  outlined  on 
page  122. 


COMMEECIAL  DRAFTS.    SCRIPT  MODEL  121 

Model  Draft  and  Entries 


i^^^^i/'gi.'^-t^ 


v^:^5CZd.s^T^^yC-^2>^2^^.,5^  "^v^^ _w^- 


lyU'^TZyf'Zy 


36?  ^ 


3CfO 


/a^u-d.^J^ 0.^-<>-t^^^^  (p-7-2^-^t^£-^^.-<d'^^-c^..£y  (^ 


<^^^M. 


v^^^ 


cn^i^.A^c-gpA^-Kd^c-g^d^^ 


'^a^t^tZ7^o/!)'y/.>^-u^rz.>'9^ 


30  (P 


0^'' 


12 

BOOKKEEPING 

DRAWER 

'-^           DRAWEEN!      ^^^    PAYEE 

AMOUNT 

1. 

J.  C.  Green 
(Your  Place) 

Amos  Hamilton 
Albany,  N.Y. 

L.  B.  Messer 

*350. 

2. 

Student 

(Your  place) 

John  Garson 
Columbus,  0. 

Henry  F.  Cook 

1402.10 

3. 

A.  B.  Mentor 
Chicago,  111. 

Student 

(Your  place) 

Carl  V.  Martin 

$378.50 

4. 

David  M.  Gay 
Alton,  111. 

John  A.  Saxon 
(Your  place) 

Student 

*1200. 

5.  You  owe  Ralph  M.  Wells,  New  York,  $400,  and  Geo.  M.  Warren, 
New  York,  owes  you  $500.  Draw  a  sight  draft  and  make  the  required 
entries,  assuming  that  the  draft  will  be  paid  on  presentation. 

6.  F.  A.  Wright,  Atlanta,  Ga.,  owes  you  $42.50  on  account.  Draw 
a-sight  draft  on  him,  in  favor  of  yourself,  indorse  it,  and  leave  it  at  The 
Union  Bank  for  collection.  In  5  da.  the  bank  informs  you  that  the  draft 
has  been  collected.    Make  the  entries. 

7.  The  Union  Bank  presents  a  sight  draft  drawn  by  O.  M.  Howe, 
Denver,  Colo.,  on  you,  in  favor  of  himself,  for  $104.25.  Pay  it  by  check 
and  make  the  entries. 

When  you  pay  a  sight  draft  drawn  on  you,  the  draft  should  be  canceled  and  kept 
as  a.  receipt. 

8.  Frank  Weeks,  Austin,  Texas,  owes  you  $200  on  account.  Draw 
a  sight  draft  on  him,  in  favor  of  yourself,  for  that  amount,  indorse  it, 
and  leave  it  at  the  First  National  Bank  for  collection.  In  6  da.  the  bank 
informs  you  that  the  draft  has  been  collected.    Make  the  entries. 

9.  The  First  National  Bank  presents  a  sight  draft  drawn  by  L.  W. 
Stacey,  Peoria,  111.,  on  you,  in  favor  of  himseK,  for  $100.  Pay  it  by  check 
and  make  the  entries. 

REVIEW  QUESTIONS 

1.  Define  commercial  draft.  2.  State  the  object  of  drafts.  3.  What  names  are 
given  to  the  parties  to  a  draft?  4.  What  is  the  drawer's  entry  when  he  draws  a 
sight  draft  on  A  in  favor  of  B  ?  5.  What  is  the  payee's  entry  for  a  sight  draft 
received  and  collected  ?  6.  What  is  the  drawee's  entry  for  a  sight  draft  paid  ?  7.  Do 
all  drafts  have  three  distinct  parties?  Explain.  8.  How  is  a  sight  draft  used  to 
collect  a  debt  ?  9.  Is  it  wise  to  draw  on  a  good  customer  without  notifying  him  in 
advance  ?  Why  ?  10.  How  would  you  indorse  a  sight  draft  left  at  The  Union  Bank 
for  collection  ? 

Commercial  Time  Drafts  are  used  in  business,  but  not  so  extensively  as 
Sight  Drafts ;  these  time  drafts  will  be  discussed  in  a  more  advanced 
portion  of  this  text. 


DRAFTS  123 


BANK  DRAFTS 


Business  men  usually  keep  an  account  with  a  bank  and  make  a  large 
proportion  of  their  payments  by  check.  However,  they  find  it  necessary 
sometimes  to  make  payment  to  persons  or  firms  who  do  not  care  to 
give  credit  for  private  checks,  and  then  some  other  form  of  transfer  must 
be  used.  A  very  common  and  convenient  form  of  remittance  is  by  means 
of  a  check  of  one  bank  upon  another.    This  is  called  a  Bank  Draft. 

Suppose  that  C.  C.  Canan,  Boston,  Mass.,  wishes  to  buy  a  bill  of  goods 
of  Jordan,  Marsh  &  Co.,  New  York,  amounting  to  |400.60.  If  his  finan- 
cial standing  is  unknown  to  Jordan,  Marsh  &  Co.,  he  should  not  send 
his  personal  check.  He  therefore  draws  the  following  check  and  exchanges 
it  at  his  bank  for  a  New  York  draft. 

Check  to  pay  for  Bank  Draft 


traders  Rational  ^ank 

"Pay  to  the  order  of   //.  I^^^^^^^r^^^^ 


The  check  is  drawn  for  50(^  more  than"  the  face  of  the  draft,  and  this 

charge  is  called  Exchange.   Some  banks  do  not  make  any  charge  to  regular 

customers.    For  this  check  the  Traders  National  Bank  will  issue  the 

following  draft: 

Bank  Draft 


Boston,  fJ<r.n^!.  JU/^^//C:\9^    Nn.  ^Z^ 

traders  Rational  Sank 

"Pay  to  the  order  nf        ^'~Xo.~6y^^^^->^^^^<^^  ■- $J,^/2A^ 

^0  Chemical  tNjational  S^nk  1  ";^^^^>A^^>^^^^--^^ 

tKew  York  J  '^  SsAfer 


124 


BOOKKEEPING 


A  bank  draft  is  usually  drawn  payable  to  the  order  of  the  purchaser, 
who  indorses  it  to  the  person  or  the  firm  to  whom  it  is  to  be  sent,  as 
shown  herewith. 


]9.=L-^o,f^Z£, 


T>ollars 


Cashier 


In  this  way  the  name  of  the  sender  appears  on  the  draft  and  he  is 
identified  as  such,  and  the  draft,  when  canceled,  is  filed  and  serves  as  a 
receipt. 

The  one  who  purchases  a  bank  draft  may  require  the  name  of  the  one  to  whom 
it  is  to  be  sent  to  appear  as  the  payee. 

In  opening  letters  that  contain  drafts,  if  the  name  of  the  sender  does  not  appear 
on  the  draft,  care  must  be  taken  to  keep  the  draft  and  the  letter  together.  If  his 
name  is  on  the  draft,  it  may  be  identified  without  the  letter. 

The  Entries.  The  sending  of  this  draft  constitutes  a  cash  payment  by 
C.  C.  Canan  to  Jordan,  Marsh  &  Co.,  and  he  makes  the  following  entry 
on  the  right  side  of  his  cashbook : 


0,.<e>c>A^iZ.'-rt^^.i!>^  iP-9z^  £Z^^'-zn/~6y 


^^^ 


BANK  DRAFTS  125 

Upon  the  receipt  of  the  draft  Jordan,  Marsh  &  Co.  will  make  this 
cashbook  entry  on  the  left  side: 


7 


tZ^T^Z-iSZyT'Z^ 


--j2^>^;^,^W'»r'-^iiC^-</  tf^eZ^ 


^OC? 


Co 


When  Jordan,  Marsh  &  Co.  make  their  deposit  for  the  day  they  will  include  the 
draft  received  from  Canan,  sucli  drafts  being  treated  as  checks. 


EXERCISE  52 

For  Oral  Work 

1.  Receive  from  Henry  Belmont  a  bank  draft  to  apply  on  account, 
$750.    Give  your  entry ;  give  his  entry.    No  exchange  charged. 

2.  Receive  from  Green  &  Co.  a  bank  draft  to  apply  on  account, 
$328.40.    Give  your  entry ;  give  their  entry.    No  exchange  charged. 

3.  Buy  of  your  local  bank  by  check,  Henry  C.  Lucas,  Cashier,  a  draft 
on  the  Chemical  National  Bank,  of  New  York,  No.  6846,  payable  to  your 
order,  for  $250.  Send  it  to  Louis  I.  Brace  in  payment  of  your  note  due 
to-day.  Give  your  entry;  give  his  entry.  In  whose  favor  should  this 
draft  be  drawn  ?  Indicate  the  proper  indorsement.   No  exchange  charged. 

4.  Buy  of  the  First  National  Bank,  of  your  city,  Thomas  E.  Gross, 
Cashier,  a  draft  on  the  Second  National  Bank,  of  New  York,  No.  2378, 
payable  to  your  order,  for  $32.50.  Indorse  it  and  send  it  to  the  Jones 
Manufacturing  Company  for  a  set  of  office  books,  to  be  used  in  your 
office.    Give  your  entry ;  give  their  entry.    No  exchange  charged. 

As  a  review,  write  the  check  and  the  draft  called  for  in  No.  3,  and  the  draft  called 
for  in  No.  4. 


SUGGESTIONS  FOR  BUSINESS  CORRESPONDENCE 

When  ordering  goods  it  is  a  common  practice  in  business  to  keep  a 
duplicate  of  the  order,  and  as  these  orders  are  generally  made  by  letter, 
a  copy  of  the  letter  is  a  convenient  and  exact  record  for  the  office  file. 
When  a  bill  of  the  goods  is  received,  if  any  question  arises  regarding  the 
original  letter,  this  duplicate  is  available  for  reference. 

As  business  correspondence  is  closely  allied  to  business  practice,  and 
is  commonly  taught  in  connection  with  it,  the  script  letter  on  page  126 
is  given  as  a  suggestion  to  the  student  and  to  the  instructor. 


126  BOOKKEEPING 

It  is  not  unusual  for  the  instructor  in  correspondence  to  select  some 
of  the  orders  of  purchase  and  sale  in  the  bookkeeping  text,  and  ask 
the  student  to  write  the  required  letters  for  these  orders.  This  plan 
correlates  the  work  in  correspondence  very  closely  with  the  work  in 
bookkeeping,  and  affords  an  unusual  variety  of  material  for  practice  in 
the  writing  of  this  kind  of  letters. 

Model  Letter  ordering  Goods 


^^.^^:.^.^^^<^^^^^^^./^- 

>/^&<^.^.^..,^^J^^^^?z-,d.^ 

-^^^^^.^^W^^z^.^;-^^^  >^7^^-<^<^ 

--c::^^^.^-^?-e'^^^:<?^^-z-.5-^'-^x- 

-Q^/€^^-/^^J^A^lJi^^--c^c^  ^e^^7^^'2::-^/'^^^^2:z.<^^ 

-^^t^d.-'C^^^A^ 

^0.^/-t>^    .y^^C^^:^;^-^^-^:::^^:^;^^-^;^^ 

Z^ 

-<::C-C<:Z^y^z^€?C€Zyt^ 

Zip 

^^!^^6^  ^  ^-<^^^l-g^ly7''Z.^€^6^C^^ 

/o       ,, 

:;^^%i^^^-'^^.^-2:-t^<^<^v_^^^^-^ 

^ 

0^'<;^^-t^€^'Tt^O^£:L^^^^^>'^^ 

:?^L^;;^.,^i^^4^:'li^^ 

-..^.f^^^ 

PART  11.    INTEEMEDIATE  WORK 


COMMERCIAL  DRAFTS 

EXERCISE  53 
A  WRITTEN  REVIEW  OF  SIGHT  DRAFTS 

On  pages  116  to  122  the  discussion  of  the  Sight  Draft  showed  that  it 
is  an  impoi'tant  factor  in  business.  A  review  of  these  pages  is  suggested, 
and  then  the  following  exercises  may  be  worked  out. 

1.  You  owed  Samuel  T.  Porter  $325  on  account,  and  on  May  6  you 
drew  a  sight  draft  on  Warren  &  Son,  St.  Louis,  Mo.,  in  favor  of  Porter, 
for  the  amount  named. 

a.  Make  your  entry,  and  the  necessary  explanations.  A  script  model  is  given 
on  page  121. 

2.  On  May  10  you  drew  a  sight  draft  on  Patterson  &  Co.,  Atlanta, 
Ga.,  for  an  invoice  dated  May  1,  for  |165.20,  in  favor  of  yourself,  and 
left  it  at  your  bank  for  collection. 

a.  Write  the  draft. 

b.  Show  the  necessary  indorsement. 

c.  Make  the  entry  for  each  pei;son  when  the  draft  is  collected. 

3.  On  May  15  you  sold  an  invoice  of  merchandise  to  Geo.  H.  Powell, 
Cleveland,  Ohio,  amountmg  to  $125.50,  subject  to  a  sight  draft  in  10  da. 
On  May  24  you  drew  a  sight  draft  on  Geo.  H.  Powell  in  favor  of  W.  R. 
Haynes,  Cleveland,  Ohio,  for  the  amount  of  the  invoice,  and  remitted 
the  draft  to  Haynes. 

a.  Trace  the  course  for  this  draft  until  it  is  paid. 

b.  Write  the  draft. 

c.  Make  your  entry. 

d.  Make  the  entry  for  each  of  the  other  persons. 

4.  On  May  20  you  bought  an  invoice  of  goods  of  Thos.  H.  Head, 
Omaha,  Nebr.,  amounting  to  $450,  subject  to  a  sight  draft  in  10  da. 
On  May  31,  A.  A.  Lewis,  of  your  city,  presented  a  sight  draft  drawn 

127 


128 


BOOKKEEPING 


on  you,  in  his  favor,  by  Thos.  H.  Head,  for  the  amount  of  the  invoice. 
The  draft  was  paid  by  a  check  on  The  Union  Bank. 

a.  Write  the  check. 

h.  Write  the  draft,  and  make  the  entry  for  each  person. 

If  a  sight  draft  was  presented  to  the  drawee,  and  payment,  by  request,  was  de- 
ferred for  a  number  of  days,  it  would  be  proper  for  him  to  accept  the  draft.  After 
acceptance,  the  sight  draft  may  be  treated  as  a  time  draft.  Some  states  allow  3  da. 
of  grace  on  sight  drafts. 

Time  Drafts.  Time  drafts  are  of  two  kinds :  namely,  those  payable  a 
certain  time  after  date,  and  those  payable  a  certain  time  after  sight,  that 
is,  a  certain  time  after  presentation  for  acceptance. 


Draft  Payable  after  Date 


$.^Z^ 


'•;^64^r^,^^^:^^  y.  /^^^^^ 


^19^ 


JPay  to  the  order  of 


^^^^^^i  /^^y-^-^-T^st^;^ 


Value  received  d^'i:^afge  to  account  of 

*Gb C^,  Jx^^^-^'(^^^^'^, . 

V^o./2-  "Due. 


TU 


/Delia 


An  Acceptance  is  a  time  draft  which  has  been  accepted.  The  preceding 
form  is  an  Acceptance,  and  it  is  treated  in  business  as  a  promissory  note. 

Without  the  writing  across  the  face  of  this  draft  it  was  not  binding  upon  the 
drawee.    He  had  not  agreed  to  pay  the  draft,  and  could  not  be  held  legally  for 
payment. 
« 

Method  of  Procedure  in  handling  Time  Drafts.  The  drawer  writes  the 
draft  and  mails  it  to  the  payee,  who  presents  it  to  the  drawee  for  accept- 
ance. In  the  foregoing  draft  the  date  of  maturity  was  not  determined 
by  the  acceptance  of  E.  W.  Masten,  and  it  was  not  absolutely  neces- 
sary for  William  M.  McKay  to  present  the  draft  until  it  was  due,  and 
then  only  for  payment;  until  the  draft  is  accepted,  there  is  no  legal 
obligation  on  the  part  of  Masten  to  pay  it,  so  it  would  be  unbusinesslike 
on  the  part  of  McKay  not  to  present  the  draft  for  acceptance  within  a 
reasonable  time  after  it  was  received. 

When  the  foregoing  draft  is  presented,  Masten  is  not  bound  to  accept 
it.    However,  if  he  does  accept  it,  he  becomes  the  acceptor  and  is  held  for 


COMMERCIAL  DRAFTS 


129 


its  payment  in  the  same  way  that  he  would  be  held  if  he  had  written 
his  promissory  note  for  the  amount. 

Maimer  of  accepting.  If  the  drawee  is  willing  to  meet  a  draft  on  him 
according  to  the  conditions  named  therein,  he  writes  the  word  Accepted 
and  signs  his  name.  This  is  generally  done  in  red  ink  across  the  face  of 
the  draft,  though  the  color  of  the  ink  has  no  particular  significance. 

In  those  states  that  allow  days  of  grace  on  sight  drafts  it  is  necessary  to  have 
them  accepted  in  the  same  manner  as  time  drafts  payable  after  sight,  unless  they 
are  paid  upon  presentation. 

To  Aonor  a  sight  draft  is  to  pay  it;  to  lionor  a  time  draft  is  to  accept  it  or  to  prepay  it. 

Analysis  of  Entries  of  Parties  to  a  Time  Draft.  -  Compare  the  foregoing 
draft  with  the  sight  draft  explained  on  page  117.  The  relation  of  the 
parties  is  identical.  Osgood  &  Co.  owe  McKay,  and  Hasten  owes 
Osgood  &  Co.  It  is  expected  that  Masten  will  accept  the  draft  when 
it  is  presented  to  him  by  McKay. 

Drawers'  Entry: 

1.  F.  V.  Osgood  &  Co.  have  given  William  M.  McKay  value  which, 
when  accepted  by  E.  W.  Masten,  is  the  same  as  bills  receivable.  There- 
fore they  should  debit  McKay. 

.  2.  When  Masten  accepts  the  draft  he  binds  himself  to  pay  one  of 
Osgood  &  Co.'s  debts.  He  is  expected  to  honor  the  draft,  and  Osgood 
&  Co.  should  therefore  credit  him,  because  by  accepting  the  draft  he 
cancels  a  debt  to  the  amount  of  1320.64. 


F.  V.  Osgood  &  Co.'s  Journal  Entry 


JZ0 


6^ 


JZO 


Payee's  entry : 

1.  The  payee,  William  M.  McKay,  instead  of  receiving  cash,  as  in  the 
case  of  the  sight  draft,  has  received  simply  E.  W.  Masten's  written 
promise  to  pay.  We  have  already  learned  that  other  people's  written 
promises  are  debited  to  Bills  Receivable  when  received. 

2.  As  in  the  case  of  the  sight  draft,  F.  Y.  Osgood  &  Co.  are  respon- 
sible for  McKay's  getting  the  draft,  and  he  should  credit  them. 


130 


BOOKKEEPING 
William  M.  McKay's  Journal  Entry 


^ 


^:7-?e^ 


JZ(P 


JZ^ 


Drawee's  entry: 

1.  When  E.  W.  Masten  has  accepted  the  foregoing  draft,  he  has  given 
the  equivalent  of  his  promissory  note,  and  we  have  already  learned  that 
when  one  issues  his  promissory  note  he  credits  Bilh  Payable. 

2.  It  is  for  F.  V.  Osgood  &  Co.  that  Masten  has  promised  to  be  bound 
by  this  draft ;  therefore  he  should  debit  them. 


E.  W.  Masten' s  Journal  Entry 


i^^^ 


/?J//^^^. 


i::^.^ 


1/fz,.^.'i.^r<J  ^  ■ 


.<^-7^l^. 


JZ^ 


6^ 


JZO 


^4/! 


Draft  Payable  after  Sight 


'^  ^^-^^^^ 


Y.^^\-;^J^^  V*  TTT 


JDollan 


This  draft  is  the  same  as  the  draft  drawn  payable  after  date  except 
as  to  the  manner  of  acceptance.  In  an  order  payable  after  sight  it  is 
necessary  to  date  the  acceptance  in  order  to  fix  the  date  of  maturity. 

The  difference  between  a  draft  payable  after  date  and  one  payable  after  sight  is 
that  the  former  begins  to  mature  on  the  date  of  the  draft,  the  latter  on  the  date  on 
which  the  draft  is  accepted.  The  date  of  acceptance  must  be  given  in  a  draft  pay- 
able after  sight,  while  it  may  or  may  not  be  given  in  a  draft  payable  after  date. 


COMMERCIAL  DRAFTS 


131 


Another  Use  of  Time  Drafts.  The  ordinary  time  draft  is  sometimes 
used  in  connection  with  sales  of  merchandise.  For  instance,  Quincy, 
Bradley  &  Co.  sell  L.  B.  Wade  &  Co.  merchandise  amounting  to  |1305 
on  the  following  terms :  30-day  draft  for  $500,  balance  in  60  da. 

A  draft  similar  to  the  following  is  mailed  with  the  bill : 


$.^r?^^ 


AJSUrrtZ^T^^^  //7.^.A^  y^yf^^ 


g/^/.^     19^=:, 


C  y>^^^.<±^.,J^, 


/Jy^^^Ly  ^^^^^  a.J^^^  /^ 


/Pay  to  the  order  of 


Or^^^,<d^^^y^  ^^ 


^^'^A-^^  7/^..^^^^^^ 


JDoUan 


Value  received  and  charge  to  account  of 


tKo.y3  "Due  y/^  /Kld^'^^.i/^^A<f.  S  ^^         ^^lU^T^O.^ 


The  Object  of  drawing  a  time  draft  in  connection  with  a  sale  of  mer- 
chandise is  twofold : 

1.  When  accepted,  the  draft  serves  as  a  written  contract. 

2.  Since  an  acceptance  is  negotiable,  it  may  be  discounted  and  cash 
realized  upon  it  before  maturity. 

Necessary  Entries  for  Second  Time  Draft.  The  sale  will  be  recorded 
in  the  sales  book  in  the  regular  way.  No  entry  will  be  made  for  the 
draft  until  it  is  returned,  accepted. 

Some  houses  instead  of  mailing  the  foregoing  draft  with  the  invoice 
place  it  in  their  bank  for  collection.  This  is  the  usual  way  of  handling 
paper  of  this  kind,  but  both  methods  are  illustrated  in  this  work. 

If  Quincy,  Bradley  &  Co.  placed  the  foregoing  draft  in  the  hands  of 
their  bankers  for  collection  instead  of  sending  it  to  the  drawees,  they 
will  make  the  entry  the  same  as  if  the  draft  were  in  their  possession, 
accepted,  for  L.  B.  Wade  &  Co.,  by  the  terms  of  the  purchase,  have  con- 
tracted to  accept  the  draft. 

The  following  is  the  form  of  the  journal  entry : 


Quincy,  Bradley  &  Co.'s  Journal 


--^^^'2^4^<?2^- 


■^^■^Cy^^'i'-i^-T^zy 


S^i7 


S^O 


132 


BOOKKEEPING 


Should  Quincy,  Bradley  &  Co.  wish  to  offer  the  draft,  when  accepted, 
for  discount,  they  may  do  so.  If  this  draft  is  discounted  July  20,  the 
date  it  is  assumed  they  received  it  from  L.  B.  Wade  &  Co.  accepted, 
they  will  make  the  following  cashbook  records: 


2^ 


Left  Side 


2^5^ 


^>/3:J^..^t€^-€>e^y^^cJ^i>i^ 


S(7lP 


2^ 


^Ul^^^teA-^^d^ 


Right  Side 


or 


Note.    Some  business  men  prefer  to  make  two  distinct  entries  for  the  above,  as 
follows : 

1.  BilU  Receivable  to  L.  B.  Wade  &  Co.  for  the  acceptance  received. 

2.  Bills  Receivable  on  the  left  side  of  the  cashbook,  |500,  and  Interest  on  the  right  side 
for  $2.08,  when  the  acceptance  was  offered  for  discount. 


PRINCIPLES  FOR  TIME  DRAFTS 

1.  Drawer's  Entry  when   a  time  draft  with  three   distinct  parties  is 
accepted : 

Payee  Drawee 

2.  Drawer's  Entry  when  he  receives  his  draft,  drawn  in  his  own  favor, 
accepted : 

Bills  Receivable  Drawee 

3.  Payee's  Entry  when  he  receives  a  time  draft  properly  accepted : 

Bills  Receivable  Drawer 

4.  Drawee's  Entry  when  he  accepts  a  time  draft : 

Drawer  Bills  Payable 

5.  Drawer's  Entry  when  he  draws  a  time  draft  on  a  second  party  in 
favor  of  himself,  and  the  drawee  prepays  it  in  cash : 

Cash  Drawee 

Interest 

6.  Drawee's  Entry  when  he  prepays  a  time  draft,  in  cash : 

Drawer  Cash 

Interest 


COMMERCIAL  DRAFTS  133 

EXERCISE  54 

For  Written  Work 
Note.  These  exercises  may  be  used  first  orally. 

1.  On  June  1,  W.  G.  Gambee,  Denver,  Colo.,  drew  on  you  at  45  days' 
sight,  in  favor  of  Fred  G.  Mercier,  of  your  city.  Upon  presentation, 
June  5,  you  accepted  the  draft.   Face  of  the  draft,  $500. 

a.  Write  the  draft  and  the  acceptance. 

b.  Make  the  entry  for  each  person. 

2.  You  bought  of  R.  H.  Macey  &  Co.,  New  York,  750  yd.  Scotch 
ginghams  at  15(f,  and  received  their  30-da.  draft  dated  June  4.  This 
you  accepted  on  June  6,  for  the  amount  of  the  invoice. 

a.  Write  the  draft  and  your  acceptance. 

b.  Make  your  entry  for  the  draft. 

c.  Make  R.  H.  Macey  &  Co.'s  entry  when  they  received  the  draft  accepted. 

In  the  above  it  is  assumed  that  R.  H.  Macey  &  Co.  made  one  entry  in  their  sales 
book  at  the  time  of  shipping  the  goods,  and  another  on  the  receipt  of  your  accept- 
ance ;  also  that  you  e(iitered  the  invoice  in  your  invoice  book,  and  made  a  journal 
entry  when  the  draft  was  accepted. 

3.  You  owed  D.  E.  Smith,  Seattle,  Wash.,  $275,  due  in  30  da.,  and 
F.  C.  Kirkman,  of  Seattle,  owed  you  $426.50,  on  account.  You  wrote  a 
draft  payable  30  da.  after  date,  and  sent  it  to  Smith ;  he  presented  the 
draft  to  Kirkman,  who  accepted  it.    This  canceled  your  debt  to  Smith. 

a.  Show  the  proper  acceptance  on  the  draft. 

b.  Make  the  entry  for  each  person. 

4.  S.  C.  Davis,  St.  Louis,  Mo.,  owed  you  $500,  due  in  30  da.  You 
needed  the  money  at  once,  and  drew  a  30-da.  sight  draft  on  him,  in  favor 
of  yourself,  and  sent  it  to  him.  He  accepted  it  and  returned  it  to  you. 
The  draft  was  dated  June  16,  and  the  acceptance,  June  18. 

a.  Write  the  draft  and  show  the  acceptance. 

b.  Make  the  entry  for  each  person. 

5.  You  drew  a  draft  payable  30  da.  after  date  on  Frank  H.  Wilson, 
Trenton,  N.J.,  in  favor  of  yourself,  for  an  invoice  dated  July  1,  for 
$210.50,  and  left  it  at  Traders  National  Bank  for  collection.  The  bank 
presented  the  draft,  and  it  was  duly  accepted.  At  maturity  Traders 
National  Bank  collected  the  draft,  deducted  25^  for  charges,  and 
remitted  the  balance  to  you. 

a.  Write  the  draft  and  the  indorsement.  Show  Wilson's  acceptance  and  entry. 

b.  Make  your  entry  when  notified  that  the  draft  had  been  accepted. 

c.  Make  your  entry  when  you  received  the  remittance. 


134  BOOKKEEPING 

6.  You  drew  a  draft  payable  10  da.  after  date  on  James  B.  Stillman, 
Louisville,  Ky.,  in  favor  of  yourself,  for  |500,  and  sent  it  to  Stillman 
for  acceptance.  The  draft  is  dated  July  6,  and  the  acceptance,  July  9. 
He  returned  the  draft,  and  you  held  it  until  it  was  paid  at  maturity. 

a.  Write  the  draft. 

b.  Show  the  acceptance. 

c.  Make  the  entry  for  each  person,  after  acceptance. 

d.  Make  the  entry  for  each  person  at  the  time  of  payment. 


EXERCISE  55 

For  Oral  Work 

1.  You  drew  a  draft  payable  30  da.  after  date  on  W.  K.  Darling,  in 
favor  of  Isaac  B.  Langley. 

a.  State  your  entry  when  you  draw  the  draft. 

b.  State  the  drawee's  entry  when  he  accepts  the  draft. 

c.  Will  the  acceptance  need  to  be  dated  ?   Why  ? 

2.  You  accepted  J.  E.  Keating's  draft  at  10  days'  sight,  in  favor  of 
Wells  &  Warriner. 

a.  State  your  entry. 

b.  When  does  a  draft  payable  after  sight  begin  to  mature  ? 

3.  Your  draft  at  10  days'  sight  for  |200,  drawn  on  The  Geo.  B.  Fur- 
man  Company,  in  favor  of  yourself,  for  the  invoice  of  Jan.  15,  has  been 
received,  accepted. 

a.  State  your  entry. 

b.  Will  the  acceptance  of  The  Geo.  B.  Furman  Company  on  the  above 

draft  need  to  be  dated  ?    Why  ? 

4.  The  draft  in  Example  3  was  taken  to  the  bank  and  discounted  8  da. 
before  maturity. 

a.  The  draft  is  payable  to  the  order  of  myself    Shall  you  need  to  indorse 

it?   Why? 

b.  State  your  entry  when  you  discount  the  acceptance. 

c.  State  the  entry  of  The  Geo.  B.  Furman  Company  when  they  pay  their 

acceptance  at  maturity. 

QUESTIONS  ON  TIME  DRAFTS 

1.  Explain  the  difference  between  drafts  payable  after  date  and  drafts  payable  after 
sight.  2.  What  is  meant  by  the  term  acceptance  ?  3.  To  what  ledger  account  will 
the  acceptances  of  other  people  be  posted?  4.  To  what  ledger  account  will  our 
own  acceptances  be  posted?  5.  When  does  an  acceptance  need  to  be  dated?  Why? 
6.  Will  banks  take  unaccepted  drafts  for  collection  ?     7.  When  a  bill  of  goods  is  sold 


COMMERCIAL  DRAFTS  135 

and  a  time  draft  is  drawn  for  all  or  a  part  of  the  sum,  what  is  the  proper  method  of 
treating  the  draft  ?  8.  Will  banks  discount  unaccepted  drafts  ?  9.  Give  the  drawee's 
entry  when  he  accepts  a  time  draft  drawn  upon  him.  10.  Give  the  drawer's  entry 
when  a  time  draft  with  three  distinct  parties  is  drawn.  11.  How  do  the  entries  of 
the  drawer  of  a  time  draft  compare  with  the  entries  of  the  drawer  ci  a  sight  draft  ? 
Why  ?  12.  Give  the  payee's  entry  when  he  receives  an  accepted  time  draft  to  apply 
on  account.  13.  Give  the  payee's  entry  when  he  receives  payment  for  an  acceptance 
at  maturity.  14.  Are  sight  drafts  ever  accepted?  Why?  15.  Are  days  of  grace 
allowed  on  sight  drafts  in  your  state  ?  on  time  drafts  ?  16.  An  acceptance  matures 
on  Sunday.  In  your  state  when  should  it  be  paid?  17.  When,  in  your  state,  should 
notes  and  acceptances  maturing  on  July  4  be  paid?  on  February  22,  if  that  date 
occurs  on  Saturday? 

EXERCISE  56 
A  Written  Review 

1.  Paid  by  check  Arthur  S.  Harrington's  sight  draft  on  you,  dated 
Birmingham,  Ala.,  Aug.  5,  in  favor  of  Horace  C.  Nelson,  of  your  city, 

for  $425. 

a.  Write  the  draft  and  the  check. 
h.  Make  the-  entry  for  each  party. 

2.  On  Feb.  2,  Roger  P.  Mills,  Oakland,  Cal.,  accepted  your  draft  at 
60  days'  sight,  dated  Jan.  29,  in  favor  of  yourself,  for  |900.  The  draft 
is  payable  at  Alliance  National  Bank. 

a.  Write  the  draft  and  show  the  acceptance. 

b.  Show  the  maturity  of  the  draft.  0/^'^^  3  • 

c.  Make  the  entry  for  each  person  when  the  draft  was  accepted. 

d.  Make  the  entry  for  each  person  when  the  draft  was  paid  at  maturity. 

Note.  When  the  time  of  a  note  or  a  draft  is  expressed  in  months,  calendar  months 
(i.e.  without  regard  to  the  exact  number  of  days  in  each  month)  are  used  to  determine 
the  date  of  maturity  ;  but  when  the  time  is  expressed  in  days,  the  exact  number  of  days 
is  used. 

A  note  or  a  draft  due  two  months  from  date  matures  on  the  corresponding  day  of  the 
second  following  month,  provided  there  is  a  sufficient  number  of  days  in  that  month  to 
make  this  possible.    If  there  is  not,  it  is  due  on  the  last  day  of  that  particular  month.    / 

Example.  Notes  and  drafts  dated  Jan.  28,  29,  30,  or  31,  and  payable  one  month  after 
date,  would  each  mature  on  Feb.  28,  except  in  leap  year  ;  but  if  payable  30  da.  after  date, 
they  would  be  due  Feb,  27,  28,  and  March  1  and  2,  respectively. 

In  most  states  the  added  day  for  leap  years  is  not  counted.  For  example,  a  note  or  a 
draft  payable  30  da.  after  Feb.  25  in  any  leap  year  is  due  March  27,  instead  of  March  26, 
as  would  be  the  case  if  the  extra  day  were  counted. 

3.  On  Feb.  1  you  sold  F.  B.  Norton,  Buffalo,  N.Y.,  on  his  acceptance 
at  60  da.,  150  doz.  cotton  hose  at  $2.50.  The  draft  drawn  on  the  date  of 
the  sale,  payable' 60  da.  after  date,  was  received,  accepted,  on  Feb.  5. 

a.  Write  the  draft  and  show  the  acceptance. 

b.  Make  your  entry  for  the  draft. 


136  BOOKKEEPING 

4.  On  Feb.  6  you  bought  of  Mechanics  National  Bank  by  check  a 
draft,  No.  7521,  on  the  Puritan  National  Bank,  New  York  City,  for 
$96.24,  and  remitted  it  to  S.  G.  Metzer  &  Co.,  Cincinnati,  Ohio,  in  full 
of  account.    Exchange  on  draft,  10^. 

a.  Write  a  check  on  Mechanics  Bank  to  cover  the  draft  and  the  exchange. 

b.  Write  the  New  York  draft.   A.  Turner,  Cashier. 

c.  Make  your  entry. 

5.  On  Feb.  20  you  remitted  your  sight  draft  on  Williams  &  King, 
Lansing,  Mich.,  in  favor  of  Goodwin  Bros.,  in  payment  of  an  invoice  of 
Feb.  18,  less  5%  discount.    Face  of  the  draft,  $190. 

a.  Find  the  face  of  the  invoice.  ^^xjt> 

b.  Write  the  draft. 

c.  Make  your  entry. 

6.  Write  these  drafts  on  paper  cut  to  the  proper  size : 

a.  Your  sight  draft  on  Chas.  S.  Snell,  Dover,  Del.,  for  $122.50,  in 
favor  of  J.  B.  Thompson. 

b.  Your  sight  draft  on  Wm.  S.  Drake,  Topeka,  Kan.,  for  $240,  in 
favor  of  yourself. 

c.  Your  draft  on  C.  H.  Spring,  Nashville,  Tenn.,  for  $300,  in  favor  of 
S.  M.  Kline,  payable  30  da.  after  date.    Show  C.  H.  Spring's  acceptance. 

d.  Your  draft  on  Davis  &  Berry,  Creston,  Iowa,  for  $75,  in  favor  of 
yourself,  payable  30  da.  after  sight.    Show  Davis  &  Berry's  acceptance. 

TEST  QUESTIONS   ON   DRAFTS 

1.  Are  drafts  ever  interest^bearing  ?  2.  Under  what  circumstances  would  you 
offer  a  bank  sight  paper  (a)  for  collection?  (b)  for  deposit?  3.  Would  the  banks 
of  your  city  readily  accept  for  deposit  or  for  collection  any  paper  with  your  restrict- 
ive indorsement  upon  it  ?  Why  ?  4.  When  will  a  draft  drawn  payable  10  da.  after 
date  mature  in  your  state  if  the  date  of  it  is  Feb.  19, 1904  ?  5.  What  is  the  drawee's 
entry  when  he  prepays  a  time  draft  instead  of  accepting  it?  6.  As  a  rule,  do  banks 
make  any  charge  for  cashing  bank  drafts?  7.  What  negotiable  paper  considered 
thus  far  may,  under  any  circumstances,  be  treated  as  cash  ? 


EXERCISE  57 

OPENING  DOUBLE-ENTRY  BOOKS 

The  following  exercises  illustrate  the  opening  of  double-entry  books 
when  the  proprietor  begins  business  with  both  resources  and  liabilities. 

The  student  is  requested  to  give  special  attention  to  these  exercises,  as  they  illus- 
trate the  opening  entries  that  will  be  used  in  subsequent  sets. 


OPENING  ENTRIES 


137 


a.  W.  D.  Fain  began  the  Jobbing  Furniture  business  July  1,  with  the 
following  resources  and  liabilities : 

Cash  in  drawer,  |2500 

Merchandise,  per  inventory,  $1600 

Jas.  R.  Milem's  note,  |500 

Interest  accrued  on  the  above  note,  $12 

Real  estate,  store  and  lot,  $5000 

Expense,  per  inventory,  $125 

Office  furniture,  safe,  books,  etc.,  $460 

The  following  owed  him  on  account : 

Wm.  K.  Duffey,  $1240 

R  E.  Bush,  $400 

C.  0.  Bond,  $300 
He  owed  the  following  on  account : 

Ralph  Dewey,  $400 

Arthur  Lehan,  $1600 
His  note  in  favor  of  Chas.  B.  Hawley,  $1387 
Discount  on  the  above  note  to  maturity,  $10.95 

The  following  is  the  entry  for  these  resources  and  liabilities : 
Madisox,  Wis.,  July  1,  19 — 


C.B. 


I,  W.  D.  Fain,  have  this  day  begun  the 
Jobbing  Furniture  business  with  the  fol- 
lowing resources  and  liabilities: 


Resources 


Cash 

Mdse. 

Bills  Rec. 

Interest 

Real  Estate 

Expense 

Office  Fixtures 

Wm.  K.  DufEey 

F.  E.  Bush 

Interest 

C.  O.  Bond 

To  W.  D.  Fain 


On  hand 
f*er  inventory 
Per  bill  book 
Accrued  on  above 
Store  and  lot 
Per  inventory 
Safe,  etc. 
Owes  on  account 
Owes  on  account 
On  bills  payable 
Owes  on  account 
Total  resources 


Liabilities 


W.  D.  Fain 

To  Ralph  Dewey 
Arthur  Lehan 
Bills  Pay. 


Total  liabilities 
Due  him 
Due  him 
Per  bill  book 


2500 
1600 

500 

12 

5000 

125 

460 
1240 

400 
10 

300 


3387 


95 


12147 


400 
1600 
1387 


95 


138  BOOKKEEPING 

The  cash  item  should  also  appear  on  the  left  side  of  the  cashbook 
as  follows: 


Julyl 


J. 


W.  D.  Fain  Cash  invested 


2500 


The  cash  item  is  checked  Q,  B.  in  the  journal  because  it  has  been 
placed  to  the  debit  of  the  Cash  account  by  the  above  record. 

W.  D.  Fain's  account  is  checked  J.  in  the  cashbook  because  this 
item  has  been  counted  in  determining  the  total  resources  and  liabiUties 
in  the  journal. 

On  a  sheet  of  journal  paper,  or  on  paper  ruled  in  journal  form,  make 
entries  for  the  following: 

h.  Chas.  R.  Osgood  began  the  Furniture  business  July  1,  with  the 
following  resources  and  liabilities: 

Cash  in  drawer,  $1700 

Chas.  R.  Dean's  note,  |500 

Interest  accrued  on  the  above  note,  $10 

Merchandise,  per  inventory,  $2600 

The  following  owed  him  on  account : 

A.  B.  Knowlton,  $1200 

George  K.  Brown,  $150 
He  owed  the  following  on  account : 

Foster,  Hills  &  Co.,  $250 

Traver,  Bowe  &  Co.,  $300 
His  note  in  favor  of  M.  B.  Hanway,  $600 
Interest  accrued  on  the  above  note,  $10 

G.  C.  B.  Ellis  began  business  July  1,  with  the  following  resources 
and  liabilities : 

Cash  in  drawer,  $2000 

Merchandise,  per  inventory,  $1300 

F.  M.  Everett's  note,  $1200 

Interest  accrued  on  the  above  note,  $19.50 

City  Water  Works  stock,  $4200 

Dividend  on  above,  earned  but  unpaid,  $168 

House  and  lot,  1625  Main  Street,  $4500 

Rent  due  from  tenants,  $95 

Horse  and  wagon,  $150 

He  owes  Manning  &  Son  on  account,  $1750 

His  note  in  favor  of  C.  0.  Bond,  $1200 

He  owes  Ellis  B.  Hanway,  on  horse  and  wagon,  $75 


OPENING  ENTRIES  139 

d,  Howard  A.  Johnson  began  business  July  1,  with  the  following 
resources  and  liabilities: 

Cash  in  drawer,  |1750 

Cash  on  deposit  in  The  Union  Bank,  $1278.50 

Merchandise,  per  inventory,  |3875.40 

He  held  notes  against  the  following ; 

John  S.  Gray,  $625 

A.  S.  Coleman,  $450 ;  interest  accrued,  $8.75 
Store  and  lot,  $4000 

His  note  in  favor  of  W.  A.  Brown,  $516.50 
Interest  accrued  on  the  above  note,  $11.50 
He  owed  the  following  on  account : 

Samuel  B.  Lewis,  $265 

French  &  Co.,  $376.40 

e.  John  D.   Rowland   began    business   July   1,   with   the    following 
resources  and  liabilities: 

Cash  in  drawer,  $975 

Cash  on  deposit  in  First  National  Bank,  $1845.50 

Office  fixtures  valued  at  $180 

A  horse  and  wagon  valued  at  $280 

Merchandise,  per  inventory,  $3246.50 

Real  estate  valued  at  $1800 

20  shares  of  A.  &  S.  Ry.  stock  at  96J  per  share 

His  note  in  favor  of  Frank  Lee,  $437.50 

Interest  accrued  on  the  above  note  for  60  da. 

He  owed  Lake  &  Son  on  account,  $275 

Lacey  &  Co.  owed  him  on  account,  $256.75 

H.  S.  Chapin's  note,  $375 

Discount  on  the  above  note  to  maturity,  30  da. 

/.  Henry  MacLane  began  business  July  1,  with  the  following  resources 
and  liabilities : 

Cash  on  deposit  in  The  Union  Bank,  $2356.70 

Merchandise,  per  inventory,  $4623.55 

Expense,  per  inventory,  $78.50 

Real  estate  valued  at  $3450 

His  note  in  favor  of  Henry  R.  Lete,  $356.25 

Ralston  &  Cooper's  note,  $350 

Interest  accrued  on  the  above  note  for  48  da. 

A  horse  and  wagon  valued  at  $250 

He  owed  Curtis  &  Co.,  on  account,  $267.40 

Peterson  &  Co.  owed  him,  on  account,  $237.50 


SET  V.   JOBBING  FURNITURE  BUSINESS 

Object.  This  set  is  designed  to  illustrate  the  Jobbing  Furniture 
business.  A  variety  of  advanced  business  forms  is  illustrated  and 
explained,  and  two  new  books  of  record  are  used.  The  transactions 
deal  largely  with  commercial  paper,  and  the  actual  handling  of  money 
is  avoided  as  far  as  possible.  Notes,  drafts,  and  acceptances,  and  the 
relations  existing  between  the  parties  connected  therewith,  are  made  a 
prominent  feature  of  the  work. 

Books  Used.  In  addition  to  the  books  with  which  the  student  is 
already  familiar,  the  bill  book  and  the  invoice  book  are  introduced. 


Model 
Bills 


NO. 

DRAWEE  OR  MAKER 

DRAWER  OR 
INDORSER 

FOR  WHAT 
RECEIVED 

WHERE 
PAYABLE 

DATE 

RECEIVED 

DRAWN 

1 

2 
3 

J.  B.  Maxwell 
W.  D.  Rimbach 
Walker,  Brown  &  Co. 

J.  B.  Topham 
Student's  name 

On  account 
On  account 
Inv.  July  2 

Union  Bank 
Union  Bank 

July 

1 
1 

June 
July 

15 
3 
2 

Bills 


TO  WHOM  PAYABLE 


Allen  &  Bailey  Fum.  Co, 
C.  O.  Boswell 
Derby  Mfg.  Co. 


FOR  WHOSE 
ACCOUNT 


C.  0.  Boswell 
Derby  Mfg.Co, 


FOR  WHAT  ISSUED 


Infullofacct 
InfuUofacct, 
Inv.  July  2 


WHERE  PAYABLE 


Union  Bank 
Union  Bank 
Union  Bank 


June 
July 


June 


July 


140 


SET  V.   JOBBING  PUKNITURE 


141 


Bill  Book.  This  book  is  used  for  recording  all  notes  or  acceptances 
which  are  received  by  the  business,  or  which  are  issued  by  the  business. 
It  is  generally  divided  into  two  parts,  one  for  bills  receivable  and  the 
other  for  bills  payable.  When  notes  or  acceptances  are  received  or  issued, 
a  full  description  of  the  paper  should  be  recorded  in  the  bill  book.  This 
book  should  exhibit  the  same  balances  as  the  Bills  Receivable  and  the 
Bills  Payable  accounts  in  the  ledger. 

The  Model  Bill  Book  given  below  is  self-explanatory.  Care  should  be 
taken  to  record  in  the  proper  columns  the  information  called  for.  Com- 
plete records  for  the  first  three  bills  receivable  and  bills  payable  for  the 
month  of  July  are  properly  entered  in  this  model. 

NoTB.  The  amounts  in  the  model  bill  book  are  for  price  list  No.  1. 

Bill  Book 
Receivable 


TIME 


30  da. 
30  da. 
30  da. 


DATE 
DUE 


July 


Aug, 


AMOUNT 


INT. 

500 
450 

883 


DATE 
DIS- 
COUNTED 


DATE  SENT 
TO  COLLECT 


July 


July 


Aug. 


Payable 


HOW  PAID 


Paid  at  bank 
Paid  at  bank 
Paid  at  bank 


1  mo. 

30  da.  sight 

10  da.  sight 


July 


AMOUNT 


INT. 

2500 
1000 
1376 


90 


July 


HOW  PAID 


Charged  at  bank 
Charged  at  bank 
Charged  at  bank 


142 


BOOKKEEPING 
Model  Invoice  Book 


ORIGINAL    INVOICES 


(Boston,  ^Miasi., ^JJC^^^^  P-         fQ- 


7^ 


Sought  of  "Derby  ^Mfg.  Co 


1      T 


II       .1     II      ZI 


/XC^^^^^^ 


V^ew  York. 


w^^^  C,  .       79- 


^ 


w/-^?^ 


^o  Qray,  Salisbury  &  Co.,  ©r. 

-/if-^  ,^^>-?^^  ^^e,,d^  J  ^ 
I  II  I       II        ^^ 


64^2  J  f 


ijs-- 


'Trenton.  !K.J.,     JU^^y  /  2-, \9=^ 

fought  ofC  IV.  Allen  &  Co. 


'^fj^  C^-yyyi^^^.^^s  ^'^^f^^^e^x 


W^     .?f.^ 


f^/^^iT 


C-^g^^^^--V?^-Yg<>r-r^?^7y^<^^ 


,^^ A^^. 


2^/Cf.f  /C^^.^^^^>^^:gi,^i^et^..^t?-^^ 


7-^-"^ 


//4^^Sa 


/  /<^4^ 


Jjl 


/fU 


/^ 


SET  V.   JOBBING  FUENITURE 


143 


^  /f- 


ORIGINAL    INVOICES 


'^ 


# 


M. 


•y/^^y 


fought  of  'Vhe  Skills  Furniture  Co. 


"^e,  ,^77^K^J^':e^et^, 


r^ 


lA 


^v^:<?   ^^^ 


/  ^ar  (J^^^^  -^^^^^.^i^-r^-^^^^^ 


^/^  ^^..<^<.^d.r^  ^^.  ^.-ez-^ri^rr^yt^. 


^^^ 


..A^ 


/Zi'C 


2.fa 


■  J*^^ 


'/'f^9y 


'fsy 


Jf^^Ja 


S^ 


Invoice  Book.  This  book  illustrates  another  form  for  recording  the 
amounts  of  all  merchandise  bought  by  the  business,  and  takes  the  place 
of  the  purchase  book  with  which  the  student  is  already  familiar.  It  is 
generally  made  up  of  original  bills.  In  regular  work  these  bills  are 
received  and  audited  and  then  pasted  into  the  invoice  book.  The  net 
amount  of  each  bill  is  carried  to  the  money  columns,  which  are  ruled 
on  the  right  of  each  page.  In  entering  items  in  the  invoice  book 
observe  the  following: 

1.  Do  not  allow  the  edges  of  the  bills  to  extend  into  the  money  col- 
umn. Invoices  coming  from  different  houses  will  not  be  of  uniform  size, 
and  when  necessary  the  edges  of  some  of  these  bills  should  be  trimmed. 

2.  Use  but  little  mucilage.  Paste  the  upper  and  the  lower  corner  of 
the  first  bill  on  each  page,  but  paste  only  the  lower  corners  of  all  the 
other  bills,  and  let  them  lap  over  each  other  as  shown  in  the  model 
invoice  book. 

3.  Place  the  amount  of  each  bill  in  the  money  column  directly  oppo- 
site the  name  of  the  firm  of  whom  the  goods  have  been  purchased. 

How  to  post  the  Invoice  Book.  This  book  is  posted  in  practically 
the  same  way  as  the  purchase  book.    In  posting  observe  the  following : 

1.  Be  sure  to  forward  the  total  of  the  money  column  from  page 
to  page. 


144 


BOOKKEEPINa 


2.  At  the  end  of  the  month,  or  at  such  other  periods  as  may  seem 
advisable,  post  the  aggregate  of  the  money  column  to  the  debit  side  of 
the  Merchandise  account. 

3.  Post  the  amount  of  each  bill  directly  from  the  invoice  book  to  the 
credit  of  the  firm  of  whom  the  merchandise  was  purchased. 

Cashbook.  The  cashbook  used  in  this  set  differs  slightly  from  that 
used  in  the  preceding  sets.  A  special  column  is  provided  on  each  side 
for  merchandise  discounts.  A  careful  study  of  the  following  illustration 
will  enable  the  student  to  use  this  book  intelligently. 

Note.  The  Mdse.  Disc,  column  is  given  a  place  in  the  cashbook  as  a  matter  of  con- 
venience. It  shows  the  deduction  on  the  invoice,  and  the  posting  to  the  credit  of  the 
customer's  account  requires  that  the  net  cash  received  should  be  added  to  the  Mdse.  Disc, 
to  ascertain  the  amount  of  the  bill  settled. 

The  Mdse.  Disc,  is  not  used  in  proving  cash. 


Cash  Receipts,  July,  19 — 


DATE 

F 

MDSE. 
DISC. 
DR. 

GENERAL 

TOTALS 

1 

8 
12 
16 
20 
25 
30 
31 

J. 

9 
12 
18 
20 
11 
11 
14 

J.  H.  Sampson                      Investment 
J.  E.  Bender                         Inv.  7/7,  less  3% 
C.  W.  Gray                           Inv.  7/5 
Bills  Rec.                               Moran's  note 
Interest                                  On  above 
C.O.D.  Accounts                  C.  B.  Moore 
J.  0.  Brown  &  Co.               Inv.  6/12,  less  1% 
Mdse.  Disc.  Dr.                    Total  for  month 

36 

12 

16 
60 

6000 

1169 

1240 

660 

5 

50 

1247 

09 
10 

60 

40 

10272 
10272 

19 

48 

76_ 

19 

SET  V.   JOBBING  EURNITURE 


145 


The  Incoming  Business  Forms.  The  list  of  incoming  business  forms 
for  July  is  given  on  pages  151  to  154.  If  the  set  is  written  without 
using  the  tablet  of  printed  incoming  forms,  it  will  be  necessary  for  the 
student  to  prepare  them  before  he  begins  to  write  the  set. 

After  these  forms  are  written,  they  should  be  placed  in  the  envelope 
marked  Incoming  Business  Forms,  and  withdrawn  as  they  are  needed 
when  writing  the  set. 

Whatever  plan  the  instructor  may  adopt,  either  using  business  prac- 
tice or  writing  the  set  as  a  study  of  the  theory  of  bookkeeping  only,  this 
material  is  immediately  at  hand  for  reference,  for  class  drills  and  dis- 
cussion, for  reviews  during  the  progress  of  the  set  or  when  the  set  is 
finished. 

This  plan  of  the  text  does  away  with  the  necessity  of  using  a  pad  of  vouchers 
which  are  wholly  independent  of  the  text. 

Cash  Payments,  July,  19 — 


DATE 


MOSE. 
DISC. 
CR. 


TOTALS 


Expense 

Expense 

Expense 

J.  O.  Moran 

Cobb,  Bates  &  Co. 

C.  W.  Allen  &  Co. 

Expense 

Expense 

Bills  Pay. 

J.  K.  Levy  &  Co. 

Stoddard  &  Co. 

Bills  Pay. 

Interest 

Expense 

Mdse. 

Mdse.  Disc.  Cr. 

Balance 


Rent 

Office  safe 

Insurance 

Sight  draft  paid 

Inv.  7/6,  less  2% 

Inv.  7/6,  less  2% 

Telegram 

Stationery,  etc. 

Accept,  favor  King 

Draft  favor  Brown  &  Co. 

Inv.  7/10,  le^s  2% 

Note  favor  Ellis  Mfg.  Co, 

On  above  note 

Salaries  to  date 

Freight  and  cartage 

Total  for  month 

In  safe,  67.09;  bank,  3600 


24 


65 


40 


150 

250 

120 

200 

1176 

852 

1 

4 

900 

1100 

1176 

500 

5 

120 

50 


40 


60 


50 


6605 


3667 


10272 


10 


09 


19 


146 


BOOKKEEPING 


Selling  Price  Lists  for  July  and  August 


ARTICLE  AND   DESCRIPTION 

1 

2 

3 

4 

5 

No.  3116 

Antique  Card  Table      .     .     . 

119.75 

113.50 

115.00 

117.50 

$24.00 

"    2546 

Antique  Library  Rocker     . 

12.00 

29.25 

11.75 

22.00 

13.50 

"    693 

Antique  Wardrobe    .     .     . 

25.75 

27.50 

29.50 

28.75 

22.90 

Blue  Chenille  Curtain  .     . 

5.00 

5.00 

5.00 

5.00 

5.00 

"    16  b 

Brass  Easel 

15.00 

15.00 

11.75 

13.00 

12.00 

"    635 

Brass  Bedstead    .... 

22.50 

24.00 

21.50 

23.00 

21.69 

"    15 

Cane-seat  Dining  Chair     . 

2.25 

1.85 

1.75 

2.22 

2.69 

«    59  a 

Cheval  Glass 

21.25 

21.99 

22.00 

20.50 

19.75 

«    71  A 

Child's  Crib 

15.75 

9.50 

16.79 

15.65 

18.50 

«    10 

China  Closet 

25.00 

24.50 

39.00 

19.90 

14.50 

"    20 

Corner  Chair  .... 

26.00 

26.00 

26.00 

26.00 

26.00 

«    245 

Cedar  Chest 

11.00 

19.00 

9.50 

9.65 

6.25 

"    16  a 

Complete  Dining-room  Set 

110.00 

98.00 

90.50 

110.00 

95.00 

«    572 

Drawing-room  Suite 

100.00 

152.25 

175.00 

125.00 

92.50 

"    170 

English  Clothes  Pole     . 

5.50 

4.10 

3.60 

3.15 

3.15 

«    5932 

Empire  Toilet  Table     . 

50.00 

39.75 

33.75 

39.75 

27.00 

"    3016 

Fancy  Rocker       .     .     . 

10.00 

10.00 

10.00 

8.50 

9.75 

"    36  b 

Gentleman's  Chiffonier 

10.00 

9.00 

17.25 

22.50 

15.90 

«    6387 

Hall  Settle       .... 

23.25 

19.25 

21.00 

22.00 

17.75 

«    16  k 

Leather-seat  Dining  Chair 

9.50 

9.00 

7.50 

9.50 

8.00 

"    169  c 

Library  Table       .     .     . 

25.00 

23.75 

21.50 

15.00 

39.00 

«    91 

Lace  Curtain  .... 

6.00 

6.00 

6.00 

6.00 

6.00 

"    16 

Lady's  Dressing  Cabinet 

40.00 

23.50 

35.00 

39.50 

38.50 

"    835 

Music  Cabinet      .     . 

5.00 

9.00 

10.00 

6.00 

3.00 

«    50 

Mahogany  Parlor  Table 

21.25 

20.00 

19.25 

15.00 

12.50 

«    626 

Mahogany  Office  Chair 

16.50 

17.25 

19.00 

13.50 

11.75 

"    396 

Mahogany  Hall  Stand  . 

65.00 

65.00 

65.00 

65.00 

65.00 

«    89 

Mahogany  Chamber  Set 

80.00 

75.00 

112.50 

60.00 

149.50 

«    1008 

Oak  Sideboard      .     .     . 

195.00 

145.00 

135.00 

120.00 

117.50 

«    2229 

Oak  Dining  Table     . 

12.25 

12.00 

10.00 

15.00 

12.75 

"    73 

Oak  Writing  Desk    . 

10.00 

14.75 

18.59 

15.00 

11.50 

"    68 

Oak  Bookcase  .     .     . 

9.75 

9.75 

9.75 

9.75 

9.75 

"    76  a 

Oak  Chamber  Set     . 

14.25 

14.25 

14.25 

14.25 

14.25 

«    687 

Ornamental  Table    . 

5.25 

12.00 

10.00 

9.50 

4.50 

"    20  D 

Parlor  Cabinet     .     . 

37.00 

43.50 

50.00 

65.00 

35.00 

"    821 

Parlor  Lamp    .     .     . 

16.00 

10.00 

9.50 

7.50 

11.50 

"    176  c 

Piano  Chair     .     .     . 

17.00 

9.00 

6.00 

9.50 

13.00 

"    57 

Reclining  Couch  .     . 

28.00 

21.00 

21.50 

17.50 

14.50 

"    17  a 

Roman  Chair  .     .     . 

18.75 

18.75 

18.75 

18.75 

18.75 

"    73 

Sofa  Bed     .... 

38.00 
92.00 

15.50 
137.50 

19.75 
139.50 

20.00 
-  75.00 

21.00 

«    5926 

Secretary  Book  Cabinet 

65.00 

"    65 

Turkish  Rocker    .     . 

24.75 

22.00 

25.00 

15.00 

18.00 

«    27  c 

Woven-wire  Mattress 

3.25 

3.00 

2.50 

4.00 

5.00 

"    16 

Wool  Mattress      .     . 

4.00 

3.00 

3.00 

2.75 

2.90 

«    495 

White  Iron  Bedstead 

5.00 

4.00 

5.00 

5.50 

6.50 

SET  V.   JOBBING  FUKNITUEE 


147 


Selling  Price  Lists  for  July  and  August 


6 

7 

"  8 

9 

10 

11 

12 

13 

$19.00 

$16.50 

$20.50 

$23.20 

$24.00 

$15.00 

$18.50 

$19.50 

12.25 

17.00 

22.00 

1^.25 

12.00 

19.25 

26.00 

27.25 

24.50 

26.75 

28.00 

29.00 

27.50 

29.50 

24.00 

30.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

13.50 

12.25 

14.00 

14.50 

17.00 

11.00 

12.75 

14.75 

22.00 

23.50 

22.50 

20.00 

21.50 

21.75 

22.25 

23.25 

2.10 

2.45 

1.90 

2.45 

2.50 

1.80 

2.20 

2.00 

21.00 

21.25 

22.00 

22.50 

19.00 

20.50 

21.50 

19.50 

15.00 

12.70 

14.50 

13.75 

10.40 

12.70 

18.00 

18.50 

24.00 

26.50 

17.75 

19.50 

14.00 

12.80 

32.50 

24.50 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

11.50 

9.75 

10.00 

9.50 

7.75 

16.00 

15.50 

12.50 

105.00 

97.50 

112.50 

95.00 

100.00 

90.00 

94.50 

110.00 

97.50 

100.00 

115.00 

102.50 

92.50 

120.00 

135.00 

137.50 

4.00 

5.20 

3.65 

3.00 

4.25 

5.00 

5.25 

3.50 

32.50 

50.00 

40.00 

42.50 

35.00 

27.50 

27.00 

36.50 

8.00 

10.00 

8.50 

9.00 

9.50 

8.25 

9.25 

10.25 

15.00 

12.50 

13.50 

17.50 

16.00 

11.50 

12.50 

22.00 

17.50 

23.25 

21.00 

17.75 

22.50 

19.75 

18.50 

17.00 

9.00 

7.20 

8.50 

7.50 

8.40 

9.50 

8.00 

7.00 

23.50 

25.00 

27.50 

29.00 

31.00 

32.50 

22.50 

19.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

35.00 

25.00 

27.00 

33.50 

38.00 

25.00 

34.00 

39.20 

5.50 

6.00 

5.00 

7.00 

6.50 

9.00 

10.00 

8.75 

20.00 

21.25 

19.50 

13.00 

15.50 

17.50 

19.25 

15.00 

15.00 

12.60 

16.40 

14.50 

18.50 

17.00 

15.00 

11.50 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

95.00 

140.00 

87.50 

90.00 

100.00 

75.00 

110.00 

105.50 

150.00 

125.00 

145.00 

120.00 

135.00 

137.50 

120.00 

160.00 

12.00 

16.00 

10.50 

13.25 

11.00 

13.20 

11.00 

13.20 

13.00 

17.50 

11.00 

14.00 

10.50 

12.40 

18.00 

17.00 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

14.25 

14.25 

14.25 

14.25 

^     14.25 

14.25 

14.25 

14.25 

6.50 

7.00 

5.00 

4.50 

8.00 

7.50 

9.00 

10.00 

40.00 

37.50 

50.00 

52.50 

60.00 

62.00 

65.00 

63.50 

8.00 

7.50 

12.50 

15.00 

13.50 

12.00 

10.50 

14.00 

10.00 

12.00 

14.50 

9.50 

8.50 

13.00 

11.00 

9.50 

20.00 

27.00 

18.00 

14.50 

16.20 

15.90 

21.50 

25.00 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

22.00 

35.00 

21.20 

24.60 

30.50 

22.70 

16.25 

28.00 

100.00 

96.00 

125.00 

132.50 

91.50 

124.00 

110.00 

112.50 

21.00 

16.25 

14.75 

24.20 

18.75 

19.40 

22.50 

23.00 

3.50 

4.00 

3.75 

4.50 

5.00 

5.50 

2.50 

3.25 

3.00 

4.00 

2.90 

3.25 

2.70 

3.20 

4.00 

3.00 

5.00 

4.00 

6.00 

4.50 

5.25 

6.25 

4.25 

6.20 

148 


BOOKKEEPING 


Selling  Price  Lists  for  July  and  August 


ARTICLE  AND   DESCRIPTION 


14 


15 


16 


17 


No 

3116 

« 

2546 

« 

693 

(( 

16  b 

(I 

635 

u 

15 

l( 

59  a 

u 

71a 

(( 

10 

i( 

20 

(( 

245 

(I 

16  a 

u 

572 

(I 

170 

u 

5932 

u 

3016 

u 

C6b 

t( 

6387 

tl 

16  k 

« 

169  c 

i( 

91 

« 

16 

<( 

835 

(I 

50 

(I 

626 

(I 

396 

« 

89 

(( 

1008 

(( 

2229 

iC 

73 

u 

68 

ii 

76  a 

(C 

687 

(( 

20  D 

u 

821 

li 

176  c 

il 

57 

i( 

17  a 

(I 

73 

« 

5926 

« 

65 

(( 

27  c 

(( 

16 

(( 

495 

Antique  Card  Table  .  .  . 
Antique  Library  Rocker  . 
Antique  Wardrobe  .  .  . 
Blue  Chenille  Curtain  .     . 

Brass  Easel 

Brass  Bedstead  .... 
Cane-seat  Dining  Chair 

Cheval  Glass 

Child's  Crib 

China  Closet 

Corner  Chair 

Cedar  Chest 

Complete  Dining-room  Set 
Drawing-room  Suite .  .  . 
English  Clothes  Pole  .  . 
Empire  Toilet  Table      .     . 

Fancy  Rocker 

Gentleman's  Chiffonier .     . 

Hall  Settle 

Leather-seat  Dining  Chair 

Library  Table 

Lace  Curtain 

Lady's  Dressing  Cabinet    . 

Music  Cabinet 

Mahogany  Parlor  Table 
Mahogany  Office  Chair.  . 
Mahogany  Hall  Stand  .  . 
Mahogany  Chamber  Set  . 
Oak  Sideboard  .... 
Oak  Dining  Table  .  .  . 
Oak  Writing  Desk    .     .     . 

Oak  Bookcase 

Oak  Chamber  Set  .  .  . 
Ornamental  Table  .  .  . 
Parlor  Cabinet      .     .     .     . 

Parlor  Lamp 

Piano  Chair 

Reclining  Couch  .     .     .     . 

Roman  Chair 

Sofa  Bed 

Secretary  Book  Cabinet 
Turkish  Rocker    .     .     .     . 
Woven-wire  Mattress     .     . 
Wool  Mattress      .... 
White  Iron  Bedstead     .     . 


$21.60 
14.50 
25.00 

5.00 
12.50 
21.00 

1.75 
23.00 
16.75 
27.50 
26.00 
14.25 
88.50 
96.50 

3.60 
34.00 
10.00 
20.00* 
17.50 

8.75 
25.00 

6.00 
32.00 

4.50 
21.00 
12.00 
65.00 
112.50 
150.00 
14.00 
15.50 

9.75 
14.25 

9.50 
45.00 
16.00 

7.00 
27.50 
18.75 
16.00 
75.00 
20.00 

4.20 

2.90 

5.50 


$13.50 
18.00 
26.00 

5.00 
16.00 
20.50 

1.95 
23.50 
16.40 
30.00 
26.00 
10.75 
94.25 
99.50 

4.20 
28.50 

9.75 
21.50 
20.00 

9.50 
35.00 

6.00 
30.00 

7.00 
18.00 
15.50 
65.00 
125.00 
130.00 
12.50 
16.50 

9.75 
14.25 

8.50 
47.50 
10.00 
10.00 
20.50 
18.75 
19.75 
65.00 
23.75 

2.50 

3.00 

4.70 


$16.50 
26.00 
25.00 

5.00 
13.00 
24.00 

2.00 
21.50 
15.75 
25.00 
26.00 
11.20 
106.00 
152.25 

4.30 
40.00 

8.00 
16.40 
17.50 

9.50 
25.50 

6.00 
34.00 

5.50 
20.00 
12.50 
65.00 
85.00 
125.00 
12.50 
13.75 

9.75 
14.25 
10.00 
50.00 

8.25 

9.50 
21.40 
18.75 
22.50 
80.00 
22.00  • 

2.75 

2.90 

4.90 


$20.00 
17.50 
27.50 

5.00 
15.00 
21.50 

2.90 
24.25 
17.25 
33.60 
26.00 
15.00 
91.50 
125.00 

5.40 
37.50 

9.50 
21.20 
19.00 

7.70 
23.00 

6.00 
31.50 

7.00 
17.50 
14.50 
65.00 
142.00 
147.50 
14.90 
17.50 

9.75 
14.25 

7.50 
43.50 
10.50 
13.00 
27.90 
18.75 
31.50 
90.00 
16.60 

3.45 

4.00 

4.40 


SET  V.   JOBBING  FURNITURE 


149 


Selling  Price  Lists  for  July  and  August 


18 

19 

20 

21 

22 

23 

24 

25 

$15.20 

$22.00 

$21.50 

$24.00 

$23.50 

$18.00 

$19.50 

$22.50 

22.00 

16.00 

24.00 

Ifi.OO 

28.20 

21.60 

26.40 

30.00 

26.00 

24.00 

29.00 

28.00 

22.50 

27.50 

22.90 

25.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

5.00 

15.40 

11.50 

14.20 

16.25 

13.25 

12.00 

13.40 

14.50 

20.00 

23.00 

21.00 

21.40 

23.50 

21.75 

22.25 

20.50 

1.80 

2.30 

1.90 

2.40 

2.30 

1.70 

1.95 

2.25 

23.00 

20.00 

19.00 

19.50 

23.50 

19.75 

22.00 

22.50 

15.40 

10.70 

12.40 

13.75 

16.20 

9.90 

11.75 

12.90 

37.50 

17.50 

18.50 

26.70 

24.90 

23.20 

15.00 

17.20 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

7.50 

6.75 

8.90 

14.20 

18.00 

12.60 

13.75 

14.50 

96,40 

100.00 

89.50 

92.00 

98.00 

97.50 

109.20 

107.00 

100.00 

160.00 

142.50 

94.50 

102.50 

99.50 

110.00 

120.00 

3.90 

3.75 

4.60 

4.40 

6.50 

4.20 

3.10 

3.35 

27.50 

35.00 

29.50 

33.50 

28.00 

35.50 

45.00 

50.00 

10.00 

9.75 

8.50 

9.25 

10.50 

8.25 

10.25 

9.00 

22.00 

23.00 

15.40 

13.90 

12.50 

9.90 

10.50 

11.80 

21.00 

22.50 

23.25 

20.00 

19.75 

17.75 

20.50 

23.00 

6.45 

9.20 

8.80 

7.60 

9.30 

9.50 

8.50 

9.00 

27.00 

22.50 

30.00 

.31.50 

28.00 

21.00 

17.50 

35.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

6.00 

24.50 

23.90 

26.20 

32.00 

39.00 

37.50 

39.00 

40.00 

9.50 

8.00 

5.00 

10.00 

8.50 

6..50 

4.50 

7.50 

16.00 

19.25 

15.50 

18.50 

21.25 

17.00 

16.25 

20.50 

16.00 

17.20 

11.70 

19.20 

18.60 

17.50 

13.30 

14.75 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

65.00 

130.00 

117.50 

94.40 

97.50 

124.00 

101.75 

109.00 

114.20 

122.50 

165.00 

175.00 

127.50 

162.50 

180.00 

187.50 

190.00 

16.20 

12.75 

10.80 

11.40 

13.65 

14.75 

11.50 

10.50 

14.65 

11.50 

10.80 

13.75 

15.60 

18.50 

17.90 

15.60 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

9.75 

14.25 

14.25 

14.25 

14.25 

,    14.25 

14.25 

14.25 

14.25 

9.50 

8.25 

7.75 

9.20 

11.00 

10.50 

7.20 

6.50 

32.50 

28.20 

31.50 

43.50 

52.00 

57.50 

60.00 

35.50 

9.75 

12.25 

11.50 

13.20 

8.75 

7.50 

11.20 

14.25 

14.20 

15.00 

12.50 

9.60 

7.80 

10.50 

15.25 

16.00 

24.20 

21.00 

25.20 

14.90 

13.80 

17.60 

20.50 

26.75 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

18.75 

23.90 

17.70 

16.90 

26.25 

27.50 

19.40 

20.00 

22.50 

88.40 

97.50 

101.00 

74.20 

81.80 

135.00 

127.50 

92.20 

15.50 

24.80 

16.75 

23.90 

22.60 

23.20 

18.80 

17.90 

4.15 

3.65 

4.40 

5.25 

4.80 

3.90 

3.35 

4.15 

3.80 

2.95 

3.90 

3.25 

3.15 

3.65 

3.00 

4.00 

6.60 

4.25 

5.35 

6.40 

6.60 

5.25 

5.10 

4.75 

150 


BOOKKEEPING 


Buying  Prices  for  July  and  August 


ARTICLE  AND  DESCRIPTION 


No.  3116     Antique  Card  Table $14.50 

2546     Antique  Library  Rocker 9.00 

693       Antique  Wardrobe 21.75 

Blue  Chenille  Curtain 4.00 

16  B      Brass  Easel 12.50 

635       Brass  Bedstead 15.75 

15  Cane-seat  Dining  Chair 1.50 

59  A      Cheval  Glass 15.25 

71a      Child's  Crib 11.50 

10         China  Closet 17.25 

20         Corner  Chair 20.00 

245       Cedar  Chest 8.50 

16  A      Complete  Dining-room  Set 78.00 

572       Drawing-room  Suite 75.00 

170       English  Clothes  Pole 3.50 

5932     Empire  Toilet  Table 39.00 

3016     Fancy  Rocker 7.50 

36  B      Gentleman's  ChifEonier      . 7.50 

6387     Hall  Settle 16.50 

16  K      Leather-seat  Dining  Chair 6.50 

169  c    Library  Table ^ 20.00 

91         Lace  Curtain 4.50 

16  Lady's  Dressing  Cabinet 30.00 

835       Music  Cabinet 4.00 

50         Mahogany  Parlor  Table 15.25 

626       Mahogany  Office  Chair 12.50 

396       Mahogany  Hall  Stand 43.00 

89         Mahogany  Chamber  Set 60.00 

1008     Oak  Sideboard 150.00 

2229     Oak  Dining  Table 9.75 

73         Oak  Writing  Desk 7.50 

68         Oak  Bookcase 7.50 

76  A     Oak  Chamber  Set 11.00 

687       Ornamental  Table 4.00 

20  D      Parlor  Cabinet 25.00 

821       Parlor  Lamp  " '.  13.00 

176  c    Piano  Chair 12.50 

57         Reclining  Couch 21.00 

17  A     Roman  Chair 15.00 

73         Sofa  Bed 30.00 

5926     Secretary  Book  Cabinet 65.00 

65         Turkish  Rocker 18.00 

27  c      Woven-wire  Mattress 1.75 

16         Wool  Mattress 2.25 

495       White  Iron  Bedstead 3.75 


I 


SET  V.   JOBBING  FURNITURE  151 

Incoming  Business  Forms  for  July 

A  tablet,  separate  from  the  text,  containing  all  the  incoming  business 
forms,  is  available  for  writing  this  set  when  business  practice  is  used. 
A  list  of  the  forms  is  given  herewith,  so  that  the  text  affords  all  mate- 
rial for  writing  the  set  if  business  practice  is  omitted.  These  forms  also 
afford  an  opportunity  for  the  study  of  the  set  as  a  whole  before  writing 
it,  thus  meeting  a  requisite  for  adequate  drill  work,  whether  business 
forms  are  used  or  not. 

If  the  set  is  written  without  using  the  business  practice,  blank  invoice 
forms  may  be  used  for  the  invoice  book,  in  recording  the  merchandise 
bought;  these  blanks  may  be  secured  of  the  publishers. 

Twenty-five  selling  price  lists  are  available  for  this  set,  and  each  one 
may  be  used  in  connection  with  the  business  forms,  whether  business 
practice  is  used  or  not. 

Let  the  instructor  assign  to  each  student  a  price  list,  and  if  business 
practice  is  used,  he  should  be  given  the  necessary  blank  forms. 

In  all  the  following  invoices  the  student  is  represented  as  the  purchaser. 

Form  1.  Note  of  J.  B.  Maxwell,  dated  City,  June  15,  drawn  in  your  favor, 
payable  at  The  Union  Bank  30  da.  after  date,  with  interest 
at  6%,  $500. 

Form  2.  J.  B.  Topham's  draft  in  his  own  favor,  on  W.  D.  Rimbach,  City, 
transferred  to  you  by  full  indorsement.  Draft  is  for  |450  and 
is  dated  City,  June  3,  payable  at  The  Union  Bank  30  da. 
after  date. 

Form  3.  Bill  of  Thorp,  Martin  &  Thorp,  798  Franklin  St.,  City,  dated 
July  1.    Terms:  cash,  less  2%.    Items  as  follows: 

4  M  Letterheads  at  $2  1  Ledger,  $6 

2  M  Envelopes  at  f  1.50  1  Journal,  $3 

1  M  Billheads,  $2         '  1  Cashbook,  |3.50 

2  gro.  Steel  Pens  at  75^  1  Sales  Book,  |3 

1  qt.  Writing  Fluid,  75^  1  Bill  Book,  |1.50 

1  doz.  Pencils,  30^  1  Invoice  Book,  $1 

Deduct  the  discount  on  the  bill  and  receipt  it. 

Form  4.  Invoice  of  Cobb,  Bates  &  Co.,  62  Portland  St.,  City,  dated 
July  3.    Terms :  3/10,  net  30  da.    Items  as  follows : 

9  #5932  Empire  Toilet  Tables  10  #76  a  Oak  Chamber  Sets 

12  #36  B  Gentleman's  Chiffoniers  5  #1008  Oak  Sideboards 

5  #16  Lady's  Dressing  Cabinets  6  #693  Antique  Wardrobes 


152  BOOKKEEPING 

Form  5.  Invoice  of  Derby  Mfg.  Co.,  17  Portland  St.,  City,  dated  July  3. 
Terms:  draft  at  10  da.  for  the  amount  of  the  bill,  less  2%. 
Items  as  follows: 

4  #20  D  Parlor  Cabinets  10  #3116  Antique  Card  Tables 

4  #169  c  Library  Tables  5  #89  Mahogany  Chamber  Sets 

10  #16  A  Complete  Dining-room  Sets 

Deduct  the  discount  on  the  bill,  as  a  draft  will  be  attached  when  it  comes  into 
your  possession. 

Form    6.  Draft  of  Derby  Mfg.  Co.,  dated  City,  July  3,  payable  at  10  days' 

sight,  on  you,  in  favor  of  themselves,  for  the  net  amount  of 

the  above  bill. 
Form    7.  J.  O.  Moran's  sight  draft,  dated  City,  July  5,  on  you,  in  his 

own  favor,  |200. 
Form    8.  Check  of  J.  E.  Bender,  dated  Troy,  July  8,  on  Traders  National 

Bank,  in  your  favor,  $1169.09. 
Form    9.  Invoice  of  W.  H.  Stearns  &  Co.,  Chicago,  111.,  dated  July  9. 

Terms :  30-da.  draft  for  one  half  of  the  bill ;  balance  in  60  da. 

Items  as  follows : 

100  #15  C.  Dining  Chairs  20  #626  M.  Office  Chairs 

100  #16  K  L.  Dining  Chairs  20  #3016  Fancy  Rockers 

10  #2229  0.  Dining  Tables  6  #2546  Ant.  Lib.  Rockers 

Form  10.  W.  H.  Stearns  &  Co.'s  draft,  dated  Chicago,  111.,  July  9,  payable 
30  da.  after  date,  on  you,  in  favor  of  themselves,  for  one  half 
the  amount  of  the  above  invoice. 

Form  11.  Your  draft  at  30  da.  from  July  5  on  Samuel  W.  Bradley,  Bed- 
ford, in  favor  of  yourself,  accepted,  for  $840.25. 
Acceptance  is  dated  July  5. 

Form  12.  Samuel  W.  Bradley's  draft,  dated  Bedford,  July  12,  at  30  da. 
from  date,  on  J.  E.  Farley,  City,  in  favor  of  himself,  for  $179. 
Transferred  to  you  by  full  indorsement. 

Form  13.  A  bank  draft  drawn  by  Traders  National  Bank,  Springfield,  on 
Chemical  National  Bank,  New  York,  July  10 ;  drawn  pay- 
able to  G.  H.  Ingalls  &  Co.,  A.  B.  Turner,  Cashier,  for 
$1085.19.    Transferred  to  you  by  full  indorsement. 

Form  14.  Invoice  of  C.  W.  Allen  &  Co.,  Trenton,  N.J.,  dated  July  9. 
Terms :  2/30,  net  60  da.    Items  as  follows : 

24  #27  c  Woven-wire  Mattresses  10  #71  a  Child's  Cribs 

24  #16  Wool  Mattresses  24  #495  White  Iron  Bedsteads 

50  #635  Brass  Bedsteads 


SET  V.    JOBBING  FURNITUEE  163 

Form  15.  Invoice  of  William  Leavens  &  Co.,  32  Canal  St.,  New  York 
City,  dated  July  11.  Terms:  sight  draft  in  10  da.  for  the 
amount  of  the  bill,  less  2%.    Items  as  follows: 

12  #73  Oak  Writing  Desks  3  #5926  Sec.  Book  Cabinets   ■ 

15  #68  Oak  Bookcases  6  #396  Mahogany  Hall  Stands 

Deduct  the  discount.  j 

Form  16.  Stoddard  &  Co.'s  draft,  dated  City,  July  14,  on  you,  in  favor 
of  themselves,  at  15  da.  from  date,  for  |400. 

Form  17.  E.  F.  Green  &  Co.'s  draft,  dated  Bangor,  July  14,  on  H.  B. 
Claflin  &  Co.,  City,  in  your  favor,  at  30  da.  from  date,  for 

*400. 
Form  18.  Invoice  of  Randall  Mfg.  Co.,  126  East  123d  St.,  New  York  City, 
dated    July  8.    Terms:    3/10,  1/30,   net    60   da.    Items   as 
follows : 

10  #57  Eeclining  Couches  50  #65  Turkish  Rockers 

5  #73  Sofa  Beds 

Form  19.  Invoice  of  S.  T.  Udell  &  Co.,  Chicago,  111.,  dated  July  16. 
Terms:  sight  draft  in  20  da.    Items  as  follows: 

19  #50  M.  Parlor  Tables  11  #10  China  Closets 

Form  20.  William  Leavens  &  Co.'s  sight  draft,  dated  New  York  City, 
July  20,  on  you,  in  favor  of  themselves,  for  the  net  amount 
of  Form  15. 

Form  21.  C.O.I),  envelope.  Get  $50  of  the  instructor  and  place  it  in 
the  envelope.  Data  as  follows:  Cash  inclosed,  $50.  Goods 
were  shipped  by  you  to  Ciias.  B.  Lyman,  Springfield,  July  17. 

Note.  An  envelope  containing  the  required  amount  of  cash  will  be  found  in  the  back 
part  of  the  tablet  of  Incoming  Business  Forms.  If  business  practice  is  used  and  the 
incoming  business  forms  are  not  used,  get  the  cash  of  the  insti-uctor. 

Form  22.  Check  of  David  E.  Teeter,  dated  City,  July  23,  on  Traders 
National  Bank,  in  your  favor,  for  $1291.95. 

Form  23.  M.  N.  Overman's  draft  on  Rogers,  Peet  &  Co.,  Buffalo,  in  favor 
of  himself,  dated  Albany,  July  13,  payable  at  30  days'  sight, 
for  $469.39.  Accepted  July  15.  Transferred  to  you  by  full 
indorsement. 

Form  24.  New  York  draft,  dated  City,  July  24,  drawn  by  The  Union 
Bank  on  Chemical  National  Bank,  in  your  favor,  Chas.  H. 
Palmer,  Cashier,  for  $319.72. 


154  BOOKKEEPING 

Form  25.  Invoice  of  C.  W.  Allen  &  Co.,  Trenton,  N.J.,  dated  July  23. 
Terms :  2/30,  net  60  da.    Items  as  follows : 

17  #572  B  Drawing-room  Suites  5  #59  a  Cheval  Glasses 

Form  26.  Stoddard  &  Co.'s  sight  draft,  dated  City,  July  27,  on  you,  in 

favor  of  themselves,  for  |150. 
Form  27.  Bill   of  the   Metropolitan  Carting  Co.,   dated   City,  July  28. 

Items  as  follows: 

July    3,  Cartage,  $12.25 

10,  Cartage,  9.50;  Freight,  |126.50 
13,  Cartage,  7.50;  Freight,  54.20 
26,  Cartage,      3.75 

Receipt  the  bill  as  follows :  Metropolitan  Carting  Co. 

Form  28.  Receipted  bill  of  the  Consolidated  Gas  and  Electric  Light  Co., 
City,  dated  July  29.  Terms:  cash,  less  5%.  Items  as 
follows : 

Meter  at  current  date,  8200  cu.  ft. 

Meter  at  last  settlement,  2000  cu.  ft. 

Gas  consumed,  6200  cu.  ft.,  at  |1.20  per  1000 

Deduct  the  discount  before  receipting  the  bill.  In  receipting,  sign  the  name  of  the 
gas  company,  per  your  initials. 

Memoranda  of  Transactions  for  July 

July  1 

You  begin  a  Jobbing  Furniture  business  at  269  Causeway  St.,  with 
the  following  resources  and  liabilities : 

Resources 

J.  B.  Maxwell's  note,  dated  June  15,  in  your  favor,  payable  at  The 
Union  Bank  30  da.  after  date,  with  interest  at  6%,  |500  ;  interest  accrued 
on  the  above  note  to  date,  |1.33, 

Discount  on  bills  payable,  |4. 

Accepted  draft,  dated  June  3,  payable  at  The  Union  Bank  30  da. 
after  date,  $450.  This  draft  is  drawn  by  J.  B.  Topham,  in  his  own 
favor,  on  W.  D.  Rimbach  and  transferred  to  you  by  full  indorsement. 

The  stock  of  furniture  of  the  late  Allen  &  Bailey  Furniture  Co.,  as 
per  schedule  on  file,  |7150. 

Cash  on  hand,  $6200. 

Store  and  lot,  269  Causeway  St.,  as  per  warranty,  deed  on  file,  |7000. 


» 


SET  V.   JOBBING  FURNITURE  165 

Office  fixtures,  etc.,  as  per  schedule  on  file,  $450. 
Two  horses,  harness,  delivery  wagon,  etc.,  valued  at  |450. 
The  following  persons  owe  you :  J.  E.  Bender,  Troy,  $1350 ;  Samuel 
W.  Bradley,  Bedford,  $750 ;  E.  F.  Green  &  Co.,  Bangor,  $400. 

Liabilities 

Your  note  at  1  mo.  from  June  25,  in  favor  of  Allen  &  Bailey  Furni- 
ture Co.,  payable  at  The  Union  Bank,  for  $2500,  with  interest  at  6%; 
interest  accrued,  $2.50. 

Discount  on  bills  receivable,  15^. 

C.  O.  Boswell's  draft  at  30  days'  sight,  dated  New  York  City,  June  20, 
on  you,  in  his  own  favor,  for  $1000.  You  accepted  it  June  25,  payable 
at  The  Union  Bank. 

You  owe  the  following  persons  on  account :  J.  O.  Moran,  City,  $2100  ; 
Paine  Manufacturing  Co.,  Bedford,  $350 ;  Stoddard  &  Co.,  City,  $4750. 

Note.  The  ledger  title  for  the  store  and  lot  is  Real  Estate;  for  the  schedule  of  office 
supplies,  Office  Fixtures ;  for  horses,  harness,  and  delivery  wagon,  Horse  &  Wagon. 

The  Interest  account  and  the  Discount  account  will  be  united  in  one  account  under 
the  title  Interest. 

Make  the  opening  journal  entry ;  enter  the  cash  item  in  the  cashbook 
also.    Record  the  notes  in  the  bill  book. 

Write  the  note  and  the  draft  given  in  the  liabilities.,  and  hand  them  in. 

Did  you  remember  to  cljeck  the  cash  item  in  the  opening  journal  entry  in  both 
the  cashbook  and  the  journal  ? ,  How  are  they  checked  ? 

In  opening  a  set  of  books  it  is  always  necessary  to  find  the  present 
value  of  the  notes  on  hand  and  outstanding,  in  order  to  determine  the 
actual  net  investment. 

The  item  of  $4  under  interest  on  the  list  of  resources  is  for  24  days'  discount  on 
the  acceptance  in  favor  of  C.  O.  Boswell.  The  draft  is  not  interest-bearing,  so  it 
will  not  be  worth  its  face  value  until  maturity.  Computing  the  discount  for  24  da.,  it 
is  found  that  a  cash  payment  of  $4  less  than  the  face  will  cancel  the  acceptance 
July  1.  Since  Bills  Payable  must  be  credited  for  the  face  of  the  draft,  the  discount 
is  treated  as  an  available  resource. 

In  like  manner  it  is  found  that  W.  D.  Rimbach's  acceptance  is  worth  15^  less  than 
its  face  value  on  July  1.  Bills  Receivable  must  be  debited  for  the  face  of  the  accept- 
ance, and  Interest  credited  for  15^  to  offset  the  overcharge  of  resources. 

Take  J.  B.  Maxwell's  note,  Form  1,  and  W.  D.  Rimbach's  acceptance. 
Form  2,  and  place  them  in  the  Unpaid  Bills  envelope.  The  warranty 
deed,  the  schedule  of  property  on  hand,  etc.,  are  assumed  to  be  on  file, 
and  you  will  make  no  reference  to  them  at  this  time. 


156  BOOKKEEPING 

Apply  to  the  instructor  for  the  cash  investment. 

Deposit  in  The  Union  Bank  all  the  cash  on  hand  except  |100. 

The  bank  account  will  be  kept  in  the  same  manner  as  in  the  introductory  work. 
An  envelope  for  filing  the  checks  drawn,  and  for  making  the  monthly  bank  state- 
ment, will  be  found  in  the  package  of  business  forms.  The  left  stub  of  the  check 
book  may  be  used  for  recording  any  important  memoranda. 

Pay  by  check  the  bill  of  Thorp,  Martin  &  Thorp,  for  books,  station- 
ery, etc..  Form  3. 

Place  the  bill  in  the  Paid  Bills  envelope. 

Secure  from  the  Manhattan  Fire  Insurance  Co.  a  policy  of  insurance 
for  |12,000  on  the  store,  the  goods,  and  the  fixtures  at  1^%  premium. 

Pay  the  premium  by  check  in  favor  of  Chas.  M.  Shaw,  general  agent  for  your 
place.    Charge  Expense. 

The  policy,  it  is  assumed,  was  received  and  filed  yesterday. 

Note.   A  policy  of  insurance  is  simply  an  insurance  company's  contract  with  the 
insured.    Such  a  contract  covers  usually  the  following : 
Premium  paid  by  the  insured. 
Term  of  insurance. 
Amount  of  insurance. 
Description  of  the  property  insured. 
Extent  of  the  company's  liability,  etc. 
This  agreement  is  signed  usually  by  the  president  and  the  secretary  of  the  company 
as  well  as  by  the  local  agent  of  whom  you  obtained  it. 

Engage  Harry  K.  Sutton  at  |60  and  Harvey  L.  Grant  at  $50  per  month 
as  salesmen  ;  Michael  Donovan  at  $30  per  month  as  delivery  man  ;  Daniel 
L.  Coon  and  Geo.  W.  Ainsley  at  |48  and  $40  per  month,  respectively, 
as  upholsterers  and  finishers. 

A  memorandum  of  the  above  may  be  made  by  the  student  and  filed  with  the 
incoming  papers. 

THINGS  TO  OBSERVE  IN  WRITING  LETTERS  ORDERING  GOODS 

1.  Arrange  the  items  one  on  a  line. 

2.  Give  shipping  directions  in  out-of-town  orders. 

3.  In  case  of  a  first  order : 

a.  Give  satisfactory  references. 
6.  State  how  you  intend  to  pay. 

4.  When  you  name  prices,  state  at  what  point  you  expect  the  goods  f.o.b. 

5.  Always  be  definite  with  regard  to  the  quality  and  the  quantity  of  the  articles 
ordered. 

6.  If  it  is  a  special  order,  state  the  purpose  for  which  the  goods  are  intended. 

7.  State,  if  necessary,  when  the  goods  must  reach  you. 


SET  V.   JOBBING  FURNITURE  157 

Model  Letter  for  ordering  Goods 

Hartford,  Conn.,  July  1,  19 — 
Mr.  Harold  M.  Bates 

136  Main  Street  ^ 

Detroit,  Michigan 
Dear  Sir  : 

Please  ship  the  following  goods,  subject  to  your 
best  cash  discount  : 

10  #5926  Secretary  Book  Cabinets 
15  #396  Mahogany  Hall  Stands 
20  #73  Oak  Writing  Desks 
10  #57  Reclining  Couches 
50  #65  Turkish  Rockers 
25  #68  Oak  Bookcases 
5  #73  Sofa  Beds 

I  am  permitted  to  refer  you  to  the  First  National 
Bank,  of  this  city,  as  to  my  business  standing. 

Yours  truly 

Write  letters,  ordering  the  following  goods : 

1.  Of  Cobb,  Bates  &  Co.,  62  Portland  St.,  City,  the  goods  outlined 
in  Form  4. 

Give  references  and  ask  for  their  best  cash  discount. 

Note.  In  this  set  no  entry  will  be  made  at  the  time  of  ordering  goods.  Almost  all 
of  the  orders  are  sent  to  out-of-town  firms,  and  sufi&cient  time  is  allowed  to  elapse  for 
the  student  to  receive  the  invoice  and  the  goods  before  making  any  entry. 

f 

2.  Of  William  Leavens  &  Co.,  32  Canal  St.,  New  York  City,  the 
goods  outlined  in  Form  15. 

Offer  to  honor  their  sight  draft  in  10  da.  for  the  amount  of  the  bill  less  the 
regular  discount  for  payments  within  10  da. 

As  you  are  a  stranger  to  this  firm,  give  New  York  City  references. 

3.  Of  C.  W.  Allen  &  Co.,  46  Merrimac  St.,  Trenton,  N.J.,  the  goods 
outlined  in  Form  14. 

You  have  had  dealings  with  this  firm  before  and  expect  their  regular  terms. 

4.  Of  Derby  Manufacturing  Co.,  17  Portland  St.,  City,  the  goods 
outlined  in  Form  5. 

Ask  them  to  allow  you  their  usual  discount,  and  to  draw  on  you  for  the  amount 
of  the  bill  at  10  da.  from  date. 


158  BOOKKEEPING 

5.  Of  W.  H.  Steams  &  Co.,  Chicago,  111.,  the  goods  outlined  in 
Form  9. 

Tell  them  that  you  will  honor  their  30-da.  draft  for  one  half  the  bill,  and  will 
pay  the  balance  in  60  da. 

Cancel  your  indebtedness  to  Paine  Manufacturiug  Co.,  Bedford,  by  a 
sight  draft  on  Samuel  W.  Bradley  of  the  same  place. 

Write  a  letter  of  remittance  and  send  it  with  the  above  draft  to  Paine  Manu- 
facturing Co.  Also  write  a  letter  to  Samuel  W.  Bradley,  notifying  him  of  the  draft 
you  have  drawn  on  him  at  sight.    Make  the  journal  entry. 

The  following  suggests  what  the  letters  should  contain. 

I 

Boston,  Mass.,  May  25,  19 — 
0.  M.  Behrns  &  Co. 

Syracuse,  N.  Y. 
Gentlemen : 

Inclo^d  find  a  sight  draft  on  K.  P.  Shedd  of  your 
city,  drawn  in  your  favor,  for  Three  Hundred  Fifty  (350) 
Dollars,  in  full  settlement  of  account  to  date. 

Very  truly  yours 

E.  R.  Gaylord  &  Co. 

per  7n. 
II 

Boston,  Mass.,  May  25,  19 — 
Mr.  K.  P.  Shedd 

Syracuse,  N.  Y. 
Dear  Sir  : 

We  have  this  day  drawn  upon  you  at  sight,  in  favor 
of  0.  M.  Behrns  &  Co.,  of  your  city,  for  Three  Hundred 
Fifty  (350)  Dollars. 

Very  truly  yours 

E.  R.  Gaylord  &  Co. 
per  m^ 

July  2 

David  E.  Teeter,  360  Main  St.,  City,  orders  the  following  goods.  The 
order  is  filled  at  the  prices  given  herewith : 

10  #5932  E.  Toilet  Tables  at  $50  3  #89  M.  Chamber  Sets  at  |80 

1  #16  A  C.  Dining-room  Set  at  $110        2  #1008  0.  Sideboards  at  $195 

1  #396  Mahogany  Hall  Stand  at  $65 

Terms:  3/5,  1/30,  net  60  da. 


SET  V.   JOBBING  FURNITURE  159 

Note.  The  space  allowed  for  recording  the  terms  of  sale  on  a  bill  is  generally  limited, 
and  bookkeepers  find  it  necessary  to  use  symbols  and  abbreviations  to  indicate  them.  The 
following  list  explains  the  meanings  of  the  abbreviations  for  terms  used  in  this  work. 

Net  30  da.  means  that  the  bill  is  to  be  paid  in  thirty  days  without  discount. 

1/30  means  that  1%  discount  will  be  allowed  if  the  bill  is  paid  within  thirty  days. 

3/10,  net  30  da.,  means  that  3%  discount  will  be  allowed  if  the  bill  is  paid  within  ten 
days,  or  the  amount  of  the  bill  will  be  due  in  thirty  days  without  discount. 

Benj.  P.  Freefman  &  Co.,  924  East  St.,  City,  order  the  following 
goods : 

12  #170  Eng.  Clothes  Poles  12  #495  W.  Iron  Bedsteads 

5  #245  Cedar  Chests  25  #821  Parlor  Lamps 

Fill  the  order.    Terms:  sight  draft  in  10  da.,  less  3%. 

Make  out  the  bill,  have  it  approved  by  the  instructor,  and  then  copy 
it  into  the  sales  book.  Deduct  the  discount  on  the  bill  and  in  the  sales 
book  also.  Draw  a  sight  draft  in  favor  of  yourself,  dating  it  10  da.  ahead. 
Write  To  be  given  to  the  bank  July  12  on  a  slip  of  paper,  pin  the  slip  to 
the  draft,  and  place  both  in  the  Business  Cash  envelope.  Make  no  entry 
for  the  draft  until  July  12. 

Note.  Some  business  men  prefer  to  wait  until  the  10  da.  have  expired  before  drawing 
the  draft.  It  is  considered  better,  however,  to  draw  the  draft  at  the  time  of  billing  the 
goods,  since  the  matter  may  be  overlooked  if  it  is  deferred  10  da. 

Walker,  Brown  &  Co.,  Albany,  order: 

5  #20  D  Parlor  Cabinets  10  #835  Music  Cabinets 

24  #176  c  Piano  Chairs  15  #821  Parlor  Lamps 

Fill  the  order.    Terms  :  draft  at  30  da.  from  date. 

The  goods  called  for  in  the  above  order  will  be  sent  by  freight,  and 
it  will  be  necessary  for  you  to  prepare  a  bill  of  lading  and  the  duplicates, 
the  shipping  order^  and  the  memorandum. 

Study  carefully  the  following  illustration  and  the  explanation.  This  is  a  new 
feature  of  your  work  ;  be  sure  you  understand  it  thoroughly. 

In  the  box  of  business  forms  there  is  a  pad  of  bill  of  lading  blanks,  and  full 
instructions  for  using  this  form. 

Use  the  pad  marked  Straight  Bill  of  Lading. 

BILLS  OF  LADING 

As  a  means  of  serving  the  convenience  of  both  the  shippers  and  the 
railway  companies,  the  Interstate  Commerce  Commission  approved  a 
uniform  bill  of  lading,  for  general  use,  June  27,  1908.  This  approval 
applies  to  two  forms  of  the  bill  of  lading  as  follows :  the  straight  bill  of 
lading  and  the  order  bill  of  lading. 


160 


BOOKKEEPING 


Model  Bill  of  Lading 

I  BIU  af  Lading -Sttadird  tem  el  StnlgM  BHI  of  Ladlag  a|>prDvad  by  the  letentate  Commerce  Commluioa  by  Order  No.  787  of  June  27,  IMS 


THE  COMMERCIAL  TRANSPORTATION  CO. 

STRAIGHT  BILL  OF  LADINQ-ORIQINAL-NOT  NEGOTIABLE 


Shipper's  No- 
Agent's  No.  - 


BECEWED,  subject  to  the  claasificAtioiu  and 


from- 


^^?7. 


Z-L 


riSs  in  eflect  on  the  date  of  issue  of  this  Original 


>^?Z<^C^ 


>f.<>^>-^»?^^r^ 


Of  Lading, 


y      ^^ 


J.9- 


-the  property  described  below,  in  apparent  good  order,  except  as  noted 


(contents  and  condition  of  contente  of  packages  unknown),  marked,  consigned  and  destined  as  Indicated  below,  which  said  Company  agrees  to  carry 
to  its  usual  place  of  delivery  at  said  destination,  if  on  its  road,  otherwise  to  deliver  to  another  carrier  on  the  route  to  said  destination.  It  is  mutually 
agreed,  as  to  each  carrier  of  all  or  any  of  said  property  over  all  or  any  portion  of  said  route  to  destination,  and  as  to  each  party  at  any  time  inter- 
ested in  all  or  any  of  said  property,  that  every  service  to  be  performed  hereunder  shall  be  subject  to  all  the  conditions,  whether  printed  or  written, 
herein  contained  (including  conditions  on  back  hereof)  and  which  are  agreed  to  by  the  shipper  and  accepted  for  himself  and  his  assigns 


The  Bate  of  Freight  from. 


-18  in  Cents  per  100  1 


IF-Tinmlft    IF  l>t  Cl>u 


IFRul*3S       IF4thCI«u      IFSth 


Consigned  to         U-^^d^.    .^/V^^^f^^Zfe 


y^^^. 


^.^r?y  r-Qn  (^. 


-i^ ~;>^.  ^^'j!A/^^^<t^  ^^  Rhippp-r        _^^&>.^r?^.'/P^.rV^^^^  ^gent 


(ThU  BUI  of  LMUog  U  to  be  signed  by  the  shipper  wd  ftoX  of  the  earrler  iHUlnc  iaiDe) 


Model  Memorandum  {Heading) 


hr  aM  b  conMCtlofl  wWi  tte  Standard  form  ••  Straight  Bill  of  Uding  approved  by  the  hrtsrrtale  Cemmaree  Commteilon  by  Order  No.  787  of  lone  27,  1908 

THE  COMMERCIAL  TRANSPORTATION  CO. 


la  an  acknowledgment  that  a  Bill  of  Lading  haa  been  isaned  and  la  not  the  Original  Bin  of  Shipper  S  No.. 

THIS   MEMORAN  0  U  M     lading,  ooi  a  copv  «r  duplicate,  covering  the  property  named  herein,  and  ia  intended  solely 

for  filing  or  record.  Agent's  No.- 


RECEIVED,  subject  to  the  classifications  and  tarifls  in  effect  on  the  date  of  the  receipt  by  the  carrier  of  the  property  described  in  the 
Original  BUI  of  fading,  ^  ^  ^-.  /I  /? 

yZt^^y, Y^^^^^     rT 19—. 


at 


^ 


^ 


'^fr-^r-'T^y?  ^y 


y^^u^^ 


-the  property  described  below,  in  apparent  good  order,  except  as  noted 


(contents  and  condition  (rf  contents  of  packages  unknown),  marked,  consigned  and  destined  as  Indicated  below,  whieb  said  Company  agrees  to  carry 
to  its  usual  place  of  delivery  at  said  destination,  if  on  its  road,  otherwise  to  deliver  to  another  carrier  on  the  route  to  said  destination.  It  is  mutually 
agreed,  as  to  each  carrier  of  all  or  any  of  said  property  over  all  or  any  portion  of  said  route  to  destination,  and  as  to  each  party  at  any  time  inter- 
ested in  all  or  any  of  said  property,  that  every  service  to  be  performed  hereunder  shaU  be  subject  to  all  the  conditions,  whether  printed  or  written, 
herein  contained  Cmduding  conditions  on  back  hereof)  and  which  are  agreed  to  by  the  shipper  and  accepted  for  himself  and  his  assigns. 


TliA  PjktA  nf  Pmialit  frntn 

is  in  Cents  per  100  fb. 

\r. 

IF  S»mW 

IF  SpKi*l 

IF     TiWM  lltl  IF  lit  CISM       IF  2d  Cl.t.        IF  Rul.  25 

IF  3d  Clu* 

IF  Rul.  26 

IF  Rul.  28 

IF  4th  CISM      IF  StK  CI.M      IF  6»»t  CI.M 

P« 

1 

■ 

I 

SEr  V.   JOBBING  FUIRNITURE  161 


Model  Shipping  Order  (Heading) 

hi  connwtlsa  wHIi  th*  Standird  lorm  ot  Straight  Bill  of  Lading  approvtd  by  the  Interstate  Commerce  CommlukNi  by  Order  No.  787  of  Juw  Tt,  19 

THE  COMMERCIAL  TRANSPORTATION  CO. 

must  be  legibly  filled  In,  In  ink,  la  Indelible  pencU,  or  In  c*rbon,  and  Shipper's  No_ 


THIS  SHIPPING  ORDER      „^^^^  ,y  ^he  agent. AgeuX'i  Ho. 

RECEIVE,  subject  to  the  claeaiflcatloiw  and  tarifis  in  effect,  on  the  date  of  Issue  of  this  Shipping  Order, 

at.      -^^^^^.^^^^rz^^^^A^      //7^..±^±^ ^U-U^^    ,f, 19=., 

^..^^  ^  /  / 

from ~v^j  .^^    ^tC-'C'-zi-fi^.^'^^^7''y^^<d^ the  property  described  below,  in  apparent  good  order,  except  as  noted 

(contents  and  condition  of  contents  of  packages  unknown),  marked,  consigned  and  destined  as  indicated  below,  which  said  Company  agrees  to  carry 
to  its  usual  place  of  delivery  at  said  destination,  if  on  its  road,  otherwise  to  deliver  to  another  carrier  on  the  route  to  said  destination.  It  is  mutually 
agreed,  as  to  each  carrier  of  all  or  any  of  said  property  over  all  or  any  portion  of  said  route  to  destination,  and  as  to  each  party  at  any  time  inter- 
ested in  all  or  any  of  said  property,  that  every  service  to  be  performed  hereunder  shall  be  subject  to  all  the  conditions,  whether  printed  or  written, 
herein  contained  (including  conditions  on  back  hereof)  and  which  are  agreed  to  by  the  shipper  and  accepted  for  himself  and  bis 

The  Bate  of  Freight  from 


-is  in  Cents  per  100  lb. 


IF     TImn  i  ttl  IF  i «<  Ci*u      IF  2d  Citn        IF  Rui*  2i        IF  3d  Glut        IF  RuK  3e        IF  Rui*  38       IF  4th  Clui      IF  5th  Ciui 


Note.  Bills  of  lading  were  lacking  in  uniformity  until  a  final  decision  of  the  Inter- 
state Commerce  Commission  regarding  them  was  secured.  Previous  to  this  they  were  so 
varied  in  size  and  form  as  to  occasion  much  confusion  and  a  consequent  loss  of  time. 

To  obviate  these  difiBculties,  business  men  appealed  to  the  Interstate  Commerce  Com- 
mission to  issue  an  order  that  would  require  a  uniform  bill  of  lading  for  all  shipments. 

This  request  resulted  in  many  conferences  between  the  shippers,  the  transportation 
companies,  and  the  Commission,  with  the  result  shown  in  the  form  of  the  bill  of  lading 
illustrated  herewith. 

The  straight  bill  of  lading  is  drawn  up  in  a  set  of  three  papers,  du- 
plicates being  made  by  using  carbons,  as  follows :  the  straight  bill  of 
lading,  original ;  the  memorandum,  an  acknowledgment  that  a  bill  of 
lading  has  been  issued ;  the  shipping  order.  This  form  is  not  negotiable^ 
and  must  be  printed  on  white  paper.  The  shipping  order  is  signed  by 
the  shipper  only,  while  the  others  are  signed  by  both  the  shipper  and 
the  agent  of  the  railway  company.  The  shipping  order  is  left  with  the 
agent ;  the  bill  of  lading  is  sent  t®  the  purchaser  of  the  goods ;  the 
memorandum  is  retained  by  the- seller.  The  goods  may  be  delivered  to 
the  purchaser  without  his  surrender  of  the  bill  of  lading. 

The  order  bill  of  lading  is  also  drawn  up  in  a  set  of  three  papers, 
but  in  this  form  the  bill  of  lading  must  be  printed  on  yellow  paper  and 
the  duplicates  on  blue  paper.  The  order  bill  of  lading  is  negotiable 
by  indorsement,  and  is  extensively  used  in  the  shipping  of  freight  that 
is  not  to  be  delivered  until  it  is  paid  for. 

When  the  order  bill  of  lading  is  used,  the  shipment  is  termed  a 
Shipper's  Order,  and  is  recorded  as  a  C.O.D.  account. 

When  an  order  bill  of  lading  is  used,  it  is  customary  to  draw  a  sight 
draft,  attach  it  to  the  bill  of  lading,  and  make  the  collection  through  a 
bank.  The  name  of  the  bank  is  written  after  Consigned  to  Order  of  and 
the  name  of  the  consignee  after  Notify.    The  consignee  cannot  get  the 


162  BOOKKEEPING 

bill  of  lading  until  he  pays  the  draft,  and  he  cannot  get  the  goods  until 
he  surrenders  the  bill  of  lading.  For  this  reason,  the  shipper's  order  is  a 
C.O.D.  transaction. 

The  bill  of  lading  must  be  used  in  connection  with  all  out-of-town  shipments, 
the  straight  bill  of  lading  for  general  orders,  and  the  order  bill  of  lading  for  all  orders 
that  are  not  to  be  delivered  until  the  goods  are  paid  for.  Observe  this  distinction 
carefully. 

Prepare  the  straight  bill  of  lading  and  the  duplicates ;  sign  the  ship- 
ping order  and  the  duplicates,  and  then  have  the  instructor  or  the 
freight  agent  sign  the  bill  of  lading  and  the  memorandum.  Place  the  bill 
of  lading  with  the  invoice,  inclose  both  in  an  envelope  addressed  to 
Walker,  Brown  &  Co.,  and  hand  it  in.  The  shipping  order  should  be 
left  with  the  freight  agent,  and  the  memorandum  placed  on  file  by  the 
shipper. 

Draw  a  draft,  in  favor  of  yourself,  payable  30  da.  from  the  date  of 
the  invoice.  Indorse  the  draft  properly  and  leave  it  with  your  bank  for 
collection. 

It  should  be  borne  in  mind  that  Walker,  Brown  &  Co.  have  agreed  to  accept  the 
draft,  and  it  will  be  honared  in  due  course. 

Make  no  entry  in  the  check  book.  Some  banks  make  a  memorandum  entry  in 
the  pass  book  for  paper  left  for  collection,  but  do  not  extend  the  amount  into  the 
money  column. 

The  straight  bill  of  lading  will  always  be  used,  unless  you  are  otherwise  instructed 
at  the  time  of  the  transaction. 

Make  an  entry  in  the  journal  in  the  same  way  as  if  the  accepted  draft  were  in 
your  possession.  Make  the  proper  record  in  the  bill  book.  Refer  to  the  model  bill 
book,  page  140. 

Leave  W.  D.  Rimbach's  acceptance  at  the  bank  for  collection. 

Indorse  it  properly  and  make  the  necessary  record  in  the  Date  S'ent  to  Collect 
column  of  the  bill  book. 

July  3 

J.  E.  Bender,  Troy,  has  agreed  to  honor  your  sight  draft,  in  favor  of 
Stoddard  &  Co.,  for  |300. 

Write  the  draft  and  the  letters  and  hand  them  in.  Make  the  proper  entry  in  the 
journal. 

The  Metropolitan  Carting  Co.  has  just  delivered  to  you  the  goods 
ordered  of  Cobb,  Bates  &  Co.  on  July  1. 

Look  up  the  invoice,  Form  4.  Enter  it  in  the  invoice  book.  (See  illustration, 
page  142.) 


SET  V.   JOBBING  FURNITURE 


163 


THINGS  TO  BE  OBSERVED  WHEN  ENTERING  PURCHASES  IN 
THE  INVOICE  BOOK 

1.  In  actual  business  never  enter  a  bill  in  the  invoice  book  until  the  goods  have 
been  received.  Sometimes  it  may  happen  that  more  than  one  bill  is  sent  for  the 
same  goods,  or  perhaps  a  bill  is  sent  and  the  goods  are  not  delivered. 

2.  When  the  goods  have  been  received,  the  invoice  for  the  same  should  be  checked. 

3.  If  everything  called  for  in  the  invoice  has  been  received,  then  the  bill  should 
be  compared  with  the  order  to  find  out  whether  or  not  you  have  received  the  goods 
you  ordered. 

4.  If  the  items  on  the  bill  agree  with  the  order,  next  observe  if  the  prices  and 
the  terms  are  what  you  bargained  for. 

5.  Examine  the  extensions  of  the  invoice  carefully  and,  if  everything  is  found 
to  be  correct,  paste  the  bill  into  the  invoice  book. 

6.  If  the  checking  shows  any  irregularities  on  the  bill  or  in  the  goods  received, 
do  not  paste  the  invoice  into  the  invoice  book,  but  hold  it,  and  immediately  notify 
the  persons  of  whom  you  are  purchasing  the  goods. 

The  goods  ordered  of  Derby  Manufacturing  Co.  have  been  delivered. 

Look  up  the  invoice.  Form  5,  and. the  draft  sent  with  it.  Form  6.  Enter  the 
invoice  in  the  invoice  book.  Accept  the  draft,  payable  at  The  Union  Bank,  and 
make  the  journal  entry.  Record  it  in  the  bill  book.  Place  the  draft  in  an  envelope, 
address  it,  and  hand  it  in. 

The  deduction  of  2%  from  the  face  value  of  this  invoice  is  a  trade  discount,  and 
really  amounts  to  a  reduction  from  the  list  price.  Only  the  net  amount  is  extended 
to  the  money  column  on  the  invoice,  as  this  is  the  selling  price  of  the  goods,  and 
this  amount  is  to  be  posted  to  the  ledger. 

This  discount  appears  only  on  the  invoice,  as  no  ledger  account  is  kept  with  the 
trade  discount. 

W.  D.  Rimbach's  acceptance  has  been  collected.  Go  to  the  bank  and 
have  the  amount  placed  to  your  credit  in  the  pass  book.  Make  the 
following  record  on  the  left  stub  of  ypnv  check  book : 


JU^ 


/  tX-OiU-^;^^- 


a^-:n--a.€y 


4<jr^ 


Credit  Bills  Receivable  on  the  left  side  of  the  cashbook.   Mark  the  note  Paid  in 
the  bill  book. 

July  5 

Pay  by  check  J.  O.  Moran's  sight  draft  on  you,  in  favor  of  himself, 
for  $200,  Form  7.  . 

Write  the  check  and  make  the  cashbook  entry.    Hand  in  all  outgoing  papers. 


164  BOOKKEEPING 

Samuel  W.  Bradley,  126  James  St.,  Bedford,  orders  the  following 
goods.    The  order  is  filled  at  the  prices  given  herewith. 

5  #3116  A.  Card  Tables  at  |19.75         3  #1008  0.  Sideboards  at  $195 

6  #687  0.  Tables  at  $5.25  .    5  #169  c  Library  Tables  at  $25 

Terms :  draft  at  30  da.,  in  favor  of  yourself,  for  the  amount  of  the  bill. 

Write  the  draft  and  have  it  approved.  Inclose  the  invoice,  the  bill  of  lading, 
and  the  draft  in  an  addressed  envelope,  and  hand  it  in.  Make  no  entry  for  the 
draft  until  it  has  been  returned,  accepted. 

Telegraph  Randall  Manufacturing  Co.,  126  Ea^t  126th  St.,  New  York, 
ordering : 

50  #&^  Turkish  Rockers  10  #57  Reclining  Couches 

5  #73  Sofa  Beds 

Do  not  use  more  than  twenty  words  for  the  message. 

Write  the  telegram  and  hand  it  to  the  instructor  for  approval.  Pay  75^  charges 
in  currency.    Debit  Expense  in  the  cashbook. 

The  following  suggests  the  general  wording  and  the  form  of  a  telegram: 


THE  UNION  TELEGRAPH  CO. 

INCORPORATED  

15,000  Offices  in  America  Cable  Service  to  all  the  World 

"W.  H.  ARMISTEAD,  President  and  General  Manager 


Receiver's  No. 


Time  Filed 


Check 


O  t  N  U   the  following  message  subject  to  the  J        BOStOIl,     MaSS.,     JulV    1,        1  Q- 
terms  on  back  hereof,  which  are  hereby  agreed  to.  )       ? ? s^ ? L^- 

To   Wm.  M.  Brown  &  Co. 

New  York  City 

Ship  fast  freight  twenty  number  sixty  library  tables 

Manning ,  Ball  &  Co. 


S^^READ  THE  NOTICE  AND  AGREEMENT  ON  BACK.=^ 


SET  V.   JOBBING  FURNITUKE  165 


THINGS  TO  BE  OBSERVED  IN  WRITING  TELEGRAMS 

1.  Omit  the  salutation,  the  complimentary  close,  and  all  superfluous  words. 
Avoid  such  expressions  as.  Ship  immediately  hy  American  Express,  etc.  Here,  and  in 
all  similar  expressions,  such  words  as  immediately,  at  once,  etc.  are  entirely  unneces- 
sary.  A  telegram  in  itself  implies  urgency. 

2.  Make  all  messages  as  short  as  possible,  but  clear  and  definite.  A  fixed  charge 
is  made  for  all  messages,  except  those  sent  by  cable,  not  exceeding  ten  words,  and 
for  every  word  in  excess  of  that  number  there  is  an  additional  charge.  All  charges 
are  regulated  somewhat  by  distance. 

3.  No  charge  is  made  for  the  name  and  the  address  of  the  person  who  is  to 
receive  the  message,  or  for  the  name  of  the  sender. 

4.  The  sender  of  a  message  should  never  include  his  street  number,  when  writ- 
ing his  address.  A  charge  is  made  for  everything  in  the  address  except  the  name 
of  the  city  or  the  town,  the  state,  and  the  date.  If  you  are  not  generally  known  in 
a  large  city  or  town,  give  the  sending  operator  your  street  address,  and  answers  will 
be  delivered  promptly,  and  no  additional  charge  made. 

5.  Numbers  should  be  written  in  full,  since  the  charge  is  the  same  for  a  figure 
as  for  a  word.  For  example.  Send  hy  fast  freight  20  #1000  mahogany  library  tables  would 
be  counted  as  fourteen  words,  while  Send  fast  freight  twenty  number  one  thousand  ma- 
hogany library  tables  would  be  counted  as  ten  words. 

6.  Except  in  a  cable  message,  each  part  of  a  compound  word  is  counted  as  an 
entire  word.    For  instance,  twenty-five  is  counted  as  two  words. 

7.  Each  initial  of  a  name  is  charged  as  a  separate  word ;  but  a  few  abbreviations 
are  counted  as  one  word ;  as,  f.o.b.,  C.O.D.,  a.m.,  p.m.,  etc. 

8.  In  cable  messages  a  charge  is  made  for  the  name  and  the  address  of  the  one 
to  whom  the  message  is  sent,  and  for  the  signature  as  well  as  for  the  message. 

9.  Many  kinds  of  cipher  language  are  used  to  guard  the  secrecy  and  reduce  the 
expense  of  messages.  This  plan  is  found  very  serviceable  when  the  cost  of  transmis- 
sion is  great,  or  when  very  important  matters  are  to  be  telegraphed  without  giving 
information  except  to  those  entitled  to  it.  Almost  all  cable  messages  are  in  cipher. 
To  telegraph  or  cable  in  cipher,  business  men  employ  what  is  called  a  code,  —  a 
system  of  abbreviations  in  which  a  single  word  stands  for  a  whole  phrase  or  sentence ; 
as.  Autumn  might  stand  for  Knoivlton,  Beach  Sf  Co.,  Butleigh,  Glastonbury,  England,  or 
We  arrived  here  this  morning,  or  any  other  expression  understood  by  both  the  sender 
and  the  receiver  of  a  telegram  or  a  cable  message. 

10.  All  messages  of  importance  should  be  repeated.  For  one  half  the  original 
cost  of  a  telegram  the  sender  of  any  message  can  have  the  receiving  operator  re- 
peat it  to  the  operator  who  sent  it.  Errors  in  important  telegrams  are  in  this  way 
avoided. 

11.  Night  messages  are  taken  at  reduced  rates.  These  can  be  sent  at  any  time 
after  6  p.m.,  but  they  are  not  delivered  until  the  next  morning. 

12.  Night  letters  will  be  received  not  later  than  midnight,  to  be  transmitted  for 
delivery  on  the  morning  of  the  next  business  day.  Fifty  words  or  less  may  be  sent 
for  the  day  rate  of  ten  words.  Additional  charges  are  made  for  more  than  fifty  words. 

13.  Day  letters  will  be  transmitted  at  one  and  one-half  times  the  standard  night 
letter  rate  for  fifty  words  or  less.  Additional  charges  are  made  for  more  than  fifty 
words. 


166  BOOKKEEPma 

■J" 

July  7 

J.  E.  Bender,  127  Main  St.,  Troy,  orders : 

15  #396  Mahogany  Hall  Stands  9  #68  Oak  Bookcases 

10  #76  A  Oak  Chamber  Sets 

Fill  the  order.    Terms :  3/5,  2/10,  net  30  da. 
Prepare  the  bill  of  lading  as  under  July  5. 

July  8 

Receive  a  check  from  J.  E.  Bender  for  the  amount  of  the  invoice  of 
July  7,  less  3%,  Form  8. 

Enter  the  check  on  the  left  side  of  the  cashbook.  Refer  to  the  second  entry  in 
the  model  cashbook,  under  cash  receipts,  page  144.  Note  the  manner  of  recording 
the  Merchandise  Discount. 

Merchandise  Discount  is  an  allowance  for  the  payment  of  an  invoice 
within  a  specified  time  from  its  date.  It  is  usually  the  result  of  giving 
optional  terms  of  settlement  to  the  buyer,  as  S/10,  1/30,  '^/60 ;  that  is, 
a  reduction  of  3%  if  payment  is  made  within  10  da.,  or  1%  if  paid 
after  the  10  da.  and  within  30  da.,  or  the  face  of  the  bill  if  payment 
is  made  after  the  30  da.  and  within  60  da. 

Because  the  buyer  has  this  option  the  invoice  is  billed  without  reduction,  as  it  is 
not  known  which  option  the  buyer  will  choose.  If  he  pays  within  the  time  for  which 
the  discount  is  allowed,  a  record  is  made  of  this  discount  as  a  regular  entry,  under 
the  title  Merchandise  Discount. 

July  10 

The  Metropolitan  Carting  Co.  has  just  delivered  the  goods  shipped 
to  you  by  W.  H.  Stearns  &  Co.,  Chicago,  111.,  Form  9. 

Accept  the  draft,  payable  at  The  Union  Bank,  Form  10,  place  it  in 
an  envelope  addressed  to  W.  H.  Stearns  &  Co.,  and  hand  it  in. 

Make  the  required  journal  entry,  and  then  record  in  the  bill  book. 

Samuel  W.  Bradley,  Bedford,  returns  your  draft  of  July  5,  on  him, 
accepted.  Form  11,  together  with  an  acceptance.  Form  12,  payable  30  da. 
from  July  12,  drawn  on  J.  E.  Farley,  City,  in  favor  of  himself,  for  $179. 
Form  12  is  transferred  to  you  by  full  mdorsement. 

Make  a  journal  entry  for  each  draft,  and  then  record  them  in  the  bill  book. 
Each  acceptance  is  journalized  under  the  same  name.  Place  them  in  the  Unpaid 
Bills  envelope. 


SET  V.   JOBBING  FURNITURE 


167 


Telegraph  S.  T.  Udell  &  Co.,  Chicago,  111.,  asking  them  to  ship  you 
by  fast  freight : 

11  #10  China  Closets  19  #50  Mah.  Parlor  Tables 

Limit  the  message  to  fourteen  words.     Hand  it  in,  and  pay  75^  charges  in 
currency. 

July  11 

G.  H.  Ingalls  &  Co.,  Springfield,  order: 

25  #20  Corner  Chairs  25  #17  a  Roman  Chairs 

They  inclose   a  New  York    draft  to   cover  the   cost  "of   the   order. 
Form  13. 

Fill  the  order.    Terms :  cash,  less  3  % . 


Write  the  invoice,  deducting  the  3%  allowed  for"  cash, 
of  lading  and  the  duplicates,  in  the  usual  form. 

Enter  the  draft  in  the  cash- 
book,  but  do  not  record  the  dis- 
count, as  the  persons  have  been 
charged  in  the  sales  book  with 
only  the  proceeds  of  the  invoice. 


Prepare  the  straight  bill 


THE  UNION  BANK 

DEPOSITED  BY 

LUKE  S.  WARDEN 


July  12,10 


July  12 

Deposit  in  the  bank  the 
check  on  hand ;  also  the  New 
York  draft  and  the  sight  draft 
on  Benj.  P.  Freeman  &  Co. 
Collection  J^  %  on  the  check. 

Note.  Banks  usually  charge 
their  depositors  a  small  fee  for 
collecting  out-of-town  checks. 
There  is  no  uniform  custom  in 
charging  for  checks,  sight  drafts, 
and  the  various  other  negotiable 
instruments  offered  for  collection. 
Nearly  always  a  small  charge  is 
made  for  collecting  any  paper  pay- 
able out  of  town.  These  charges 
range  from  ■^^%  to  \%.  As  a  rule, 
no  charge  is  made  to   a  regular 

depositor  for  collecting  paper  payable  in  the  city  nor  to  a  customer  who  keeps  a  large 
bank  account.   The  student  will  be  instructed  when  the  bank  makes  any  charges. 

Make  out  a  deposit  ticket  and  deduct  the  collection. 

Indorse  each  paper  and  then  enter  the  deposit  in  the  check  book.  Debit  Collec- 
tion Sc  Exchange  for  the  bank's  charges.  Credit  Benj.  P.  Freeman  Sf  Co.  for  the 
sight  draft  in  the  cashbook,  for  no  entry  was  made  when  the  draft  was  drawn. 


Please  list  each  check  separately 

Bills 

CtoIH 

wSilvftr 

Charts  ^ 

1140 

15 

511 

20 

278 

75 

1930 

10 

Less   Exchange 

1 

14 

1928 

96 

168 


BOOKKEEPING 


July  12 
Leave  J.  B.  Maxwell's  note  at  the  bank  for  collection. 

Take  J.  B.  Maxwell's  note  from  the  Unpaid  Bills  envelope,  indorse  it,  and  then 
hand  it  to  the  bank  teller.  No  record  will  be  made  in  the  pass  book  until  the  bank 
reports  the  collection. 

Discount  Samuel  W.  Bradley's  acceptance  for  the  invoice  of  July  5, 
and  receive  credit  for  the  proceeds. 

Take  Bradley's  acceptance  from  the  Unpaid  Bills  envelope,  indorse  it,  and  then 
make  out  a  discount  memorandum  similar  to  the  following : 

Form  of  Discount  Memorandum 


DISCOUNT   MEMORANDUM 


Date XA^yf.^^  /  ^^    19^= 

Discounted  for     Cy(y^7<^yr"/Y .  y/Z^^^7-^^^^ 

Maker  /j^^T-T^^^^C/fy^^ 

Indorser 


Face,  I V  /^/^-^nterest,  \. 


.Total.  I^f^^rr 


Discount  (^^d^  \  f~-^  Coll.,  \ Total,  \s^ 

Proceeds,  \  4^^f  6~^^ 


Compute  the  discount  at  6%. 

Pin  the  discount  memorandum  and  the  acceptance  together,  place  them  in  the 
pass  book,  and  then  hand  it  to  the  bank  teller,  who  will  give  you  credit  for  the 
proceeds. 

Enter  the  proceeds  as  a  deposit  in  the  check  book. 

In  the  cashbook  remember  to  credit  the  acceptance  for  its  face  value;  debit 
Interest  for  the  discount. 

In  the  bill  book,  in  the  Date  Discounted  column,  write  July  12. 


SET  V.    JOBBING  FURNITUEE  169 

Give  Cobb,  Bates  &  Co.  a  check  for  the  invoice  of  July  3,  less  the 
discount  allowed  for  prompt  payment. 

Write  the  check,  hand  it  in,  and  make  the  entry  in  the  cashbook.  The  cashbook 
entry  will  be  the  same,  except  the  amounts,  as  the  jifth  entry  in  the  model  cash- 
book,  under  payments,  page  145. 

Receive  the  goods  ordered  of  C.  W.  Allen  &  Co.,  on  July  1,  Form  14. 

July  13 

The  Metropolitan  Carting  Co.  has  delivered  the  goods  ordered  of 
William  Leavens  &  Co. 

Look  up  the  invoice,  Form  15,  and  enter  it  in  the  invoice  book.  Note  that 
William  Leavens  &  Co.  have  deducted  the  discount  on  the  invoice.  You  will  receive 
their  sight  draft  on  you  for  the  net  amount  of  the  invoice  in  10  da. 

No  entry  is  made  for  the  trade  discount.    Why  ? 

Remit  C.  W.  Allen  &  Co.  a  check  for  invoice  of  July  9,  less  the  dis- 
count allowed  for  prompt  payment. 
Also  order  the  following : 

5  #59  A  Cheval  Glasses  17  #572  Drawing-room  Suites 

Write  the  check  and  have  it  approved ;  enter  it  in  the  cashbook.  Write  a  letter, 
inclosing  the  check  and  ordering  the  goods. 

Your  acceptance  in  favor  of  Derby  Manufacturing  Co.,  made  payable 
at  your  bank,  is  due  to-day.   The  bank  charges  the  amount  to  your  account. 


THE  CIRCUMSTANCES  UNDER  WHICH  A  BANK  WILL  CHARGE  A 
DEPOSITOR  WITH  A  NOTE  OR  A  DRAFT 

1.  Banks  are  not  uniform  in  their  practice  of  charging  notes,  accepted  drafts,  etc. 
In  some  places,  notably  in  Chicago  and  several  other  large  Western  cities,  they 
require  their  patrons  to  meet  all  such  paper  by  check. 

2.  The  practice  followed  by  some  banks  is  to  pay  notes,  acceptances,  etc.  out  of  a 
firm's  deposit,  and  to  charge  the  depositor  the  same  as  they  would  had  he  drawn 
a  check.  Court  decisions  and  special  laws  in  force  in  a  number  of  states  hold  that 
notes,  acceptances,  etc.  made  payable  at  a  bank  are  orders  upon  that  bank  and  may 
be  charged  to  a  depositor's  account  at  maturity  the  same  as  a  regular  check. 

3.  These  special  laws  and  decisions  are  in  operation  in  New  York,  Massachusetts, 
Connecticut,  and  a  few  other  states.  In  these  sections  many  banks  charge  notes, 
etc.,  to  their  patrons*  accounts  at  maturity. 

Enter  the  amount  in  the  check  book  on  the  regular  stub,  and  include  this  item  in 
the  total  that  is  carried  forward  to  the  next  stub. 

Debit  Bills  Payable  in  the  cashbook.    Mark  the  acceptance  paid  in  the  bill  book. 


170 


BOOKKEEPING 


July  15 

Your  bank  has  received  cash  for  J.  B.  Maxwell's  note  and  the  interest 
due  to-day. 

Enter  the  sum  of  the  note  and  the  interest  as  a  deposit  in  the  check  book. 

Accept,  payable  at  your  bank,  Stoddard  &  Co.'s  draft  in  favor  of 
themselves,  at  15  da.  from  July  14,  for  $400,  Form  16. 

Do  not  date  the  acceptance.  Why?   Make  the  journal  entry,  and  then  record  the 
acceptance  in  the  bill  book. 

Receive  of  E.  F.  Green  &  Co.  a  draft  drawn  in  your  favor,  payable 
30  da.  from  July  14,  on  H.  B.  Claflin  &  Co.,  City,  for  $400,  Form  17. 

Present  the  draft  to  the  instructor ;  he  will  give  you  directions  about  having  it 
accepted  for  H.  B.  Claflin  &  Co. 

Receive  the  goods  ordered  of  Randall  Manufacturing  Co.  on  July  5, 
Form  18. 

July  16 

Give  Randall  Manufacturing  Co.  your  check  for  the  amount  of  the 
invoice  of  July  8,  less  3%. 

July  17 

M.  N.  Overman,  493  King  St.,  Albany,  orders : 

3  #693  Antique  Wardrobes  30  #65  Turkish  Rockers 

3  #73  Sofa  Beds 

References  are  satisfactory  and  you  fill  the  order.    Terms :   3/10, 1/30, 
net  60  da. 

AVrite  the  invoice  and  have  it  approved,  and  then  record  it  in  the  sales  book. 
Place  the  invoice  and  the  bill  of  lading  in  an  envelope  and  hand  it  in. 

Receive  a  telegraphic  order  from  Chas.  B.  Lyman,  Springfield,  for 

4  pr.  Blue  Chenille  Curtains  5  pr.  #91  Lace  Curtains 
The  goods  are  to  be  shipped  by  express  C.O.D. 

Make  out  a  receipted  invoice ;  enter  it  in  the  sales  book  as  follows : 


S^^kdy:  #^/  c^^^^jrz-^^T^^ift^^-^^^^.^?^^ 


J 

Zc? 

/-^ 

3  0 

— 

^0 

" 

SET  V.   JOBBING  FURNITURE  171 

Place  the  invoice  in  a  C.O.D.  envelope,  fill  it  out  properly,  and  hand  it  in. 

When   posting,   debit  Chas.   B.   Lyman  under   C.O.D.    Accounts^   as 
follows  : 


7^.  CyTc^/y^  (^yCc^i>t^-t^.^n.^ 


'7 


'^'fietd . /'^^^s^y^n-tt^ny    6> 


S^ 


July  18 

Receive  the  goods  ordered  of  S.  T.  Udell  &  Co.,  Chicago,  111.,  on 
July  10,  Form  19. 

July  19 

P.  R.  Brown,  Rochester,  orders : 

25  #635  Brass  Bedsteads  25  #6387  Hall  Settles 

Fill  the  order,  subject  to  the  order  of  The  Union  Bank. 


DRAFT  WITH  BILL  OF  LADING  ATTACHED 

For  the  convenience  of  shippers  when  the  responsibility  or  the  credit  of  the 
buyer  is  limited  or  when  his  business  standing  is  unknown,  railway  and  steamship 
companies  have  provided  a  way  whereby  goods  may  be  sent  by  freight  so  that  the 
buyer  cannot  obtain  possession  of  them  without  first  paying  for  them.  This 
method  is  commonly  known  among  business  men  as  Shipper's  Order,  and  is  anal- 
ogous to  C.O.D.  shipments  in  the  express  business,  as  explained  in  the  transaction 
of  July  17. 

Throughout  the  text,  transactions  of  this  kind  will  be  entered  as  C.O.D.  accounts. 

In  this  shipment  it  will  be  necessary  to  make  out  an  order  bill  of 
lading.  This  form  is  described  and  illustrated  on  pages  159  to  162. 
Observe  the  following  directions: 

After  the  words  Consigned  to  order  of,  write  The  Union  Bank,  and  on  the  line 
following  write  your  address. 

After  Notify,  write  P.  R.  Brown,  and  on  the  line  following  write  Rochester,  N.  Y. 

Write  a  sight  draft  for  the  amount  of  the  invoice,  indorse  it  to  The 
Union  Bank,  attach  it  to  the  bill  of  lading,  and  then  leave  it  with  the 
bank  for  collection. 


k 


Send  the  invoice  to  your  customer  in  the  usual  way. 

Enter  in  the  sales  book  as  a  C.O.D.  item.    See  script  illustration  under  July  17. 


172 


BOOKKEEPING 


HOW  THE  COLLECTION  WILL  BE  MADE  BY  YOUR  BANK 

Your  bank  will  indorse  both  the  draft  and  the  bill  of  lading,  and  send  them  to 
its  correspondent  at  Rochester. 

When  the  Rochester  bank  receives  the  draft  it  will  notify  Brown.  If  he  pays 
it,  the  bank  will  give  him  the  freight  receipt,  which  receipt,  when  properly  indorsed 
and  given  to  the  transportation  company,  will  give  him  access  to  the  goods. 

Transportation  companies  will  not  deliver  goods  without  obtaining  an  order  bill 
of  lading,  for  they  would  thereby  render  themselves  liable  to  the  shippers  should  the 
consignee  not  pay  for  the  goods. 

July  22 

Pay  William  Leavens  &  Co.'s  sight  draft,  in  favor  of  themselves,  for 
the  amount  of  the  invoice  of  July  11,  Form  20. 

Verify  the  amount  of  the  draft  by  comparing  it  with  the  amount  of  the  invoice 
in  the  invoice  book.  If  correct,  write  a  check  for  it.  Make  the  cashbook  entry.  Write 
Paid  across  the  face  of  the  draft  and  keep  it  as  a  receipt. 

Receive  returns  for  the  C.O.D.  shipment  of  July  17,  Form  21. 

Take  the  money  out  of  the  C.O.D.  envelope  and  place  it  in  the  Business  Cash 
envelope.  (If  the  Incoming  Business  Forms  are  used,  the  envelope  containing  the 
currency  will  be  found  in  the  back  of  the  tablet.) 

Enter  in  the  cashbook  as  follows : 


Left  Side 


Z2 


SO 


July  23 

Receive  a  check  of  David  E.  Teeter,  in  full  for  the  invoice  of  July  2, 
less  1%,  Form  22. 

Examine  the  check  and  verify  the  amount ;  if  correct,  make  the  cashbook  entry. 

Receive  of  M.  N.  Overman,  Roger,  Peet  &  Co.'s  acceptance  at  30  da. 
from  July  16,  to  apply  on  account,  $469.39,  Form  23. 

The  draft  has  22  da.  yet  to  run,  so  it  is  not  worth  its  face  value.  The  discount 
for  22  da.  at  6%  should  be  deducted.  Make  the  journal,  entry,  and  then  record  in 
the  bill  book.  Do  not  mark  it  Discounted  in  the  bill  book,  but  enter  the  draft  at 
its  face  value. 

July  24 

Write  a  letter  to  J.  K.  Levy  &  Co.,  27  East  126th  St.,  New  York, 

ordering : 

15  #693  Antique  Wardrobes 


SET  V.   JOBBING  FURNITURE  173 

Inclose  a  New  York  draft  for  the  amount,  less  2%.  Buy  the  draft  by- 
check.    Exchange,  30^. 

Write  a  check  to  cover  the  draft  and  the  exchange.  The  form  of  this  check  is 
given  on  page  123. 

Take  the  New  York  draft,  Form  24,  and  indorse  it.  Debit  J.  K.  Levy  ^  Co.  in  the 
cashbook  for  the  face  of  the  draft,  and  debit  Collection  S^  Exchange  for  the  amount 
of  the  exchange. 

Inclose  the  draft  in  a  letter. 

When  a  remittance  is  sent  with  an  order,  the  amount  may  have  been  determined 
by  previous  correspondence,  or  by  reference  to  prices  quoted  in  a  catalogue  issued 
by  the  firm. 

July  25 

Your  acceptance  in  favor  of  C.  O.  Boswell,  and  your  note  with  interest 
for  one  month,  in  favor  of  Allen  &  Bailey  Furniture  Co.,  have  been 
charged  to  your  account  at  the  bank. 

Make  the  entries  in  the  cashbook  and  the  check  book.  Refer  to  a  similar  transac- 
tion under  July  13.    Mark  the  notes  Paid  in  the  bill  book. 

Chas.  B.  Sherman,  23  West  Ave.,  Rochester,  orders : 

50  #15  Cane-seat  Dining  Chairs  3  #2229  Oak  Dining  Tables 

25  #16  K  Leather-seat  Dining  Chairs       16  #3016  Fancy  Rockers 

References  are  satisfactory  and  you  fill  the  order.  Terms :  sight  draft 
in  30  da.  for  the  amount  of  the  bill,  less  1%. 

Prepare  the  usual  bill  of  lading.  Place  the  invoice  and  the  bill  of  lading  in  an 
addressed  envelope  and  hand  it  in. 

Draw  a  sight  draft,  dating  it  ahead  30  da.,  in  favor  of  yourself,  for  the  amount  of 
the  bill,  less  1%.  Have  the  draft  approved  and  place  it  in  the  Business  Cash  envelope. 
Do  not  count  this  draft  in  proving  cash. 

The  Metropolitan  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  C.  W.  Allen  &  Co.  on  July  13,  Form  25. 
Draw  cash  for  private  use,  $75. 

Take  $75  from  the  Business  Cash  envelope  and  place  it  in  the  Personal  Cash 
envelope. 

July  27 

Pay  by  check  Stoddard  &  Co.'s  sight  draft,  in  favor  of  themselves, 
for  *150,  Form  26. 

Place  the  draft  in  the  Paid  Bills  envelope. 

Deposit  the  check  and  all  the  cash  on  hand. 

Make  the  proper  indorsements  before  offering  any  paper  for  deposit. 


174 


BOOKKEEPING 


David  E.  Teeter,  City,  placed  the  following  order  with  you  over  the 
telephone  this  morning.  The  order  is  filled  at  the  prices  given  herewith : 

15  #16  B  Brass  Easels  at  $15  19  #68  Oak  Bookcases  at  $9.75 

5  #20  D  Parlor  Cabinets  at  $37 

Terms :  3/5,  1/30,  net  60  da. 

Pay  by  check  the  bill  of  the  Metropolitan  Carting  Co.  for  freight  and 
drayage  to  date,  $213.70. 

Examine  the  bill,  Form  27.  Debit  Merchandise  for  the  amount. 

Note.   Merchandise  is  charged  for  the  freight  and  cartage  because  such  an  expenditure 
is  made  for  handling  the  goods  bought  and  sold. 

July  29     • 

Pay  by  check  gas  bill  for  the  month,  $7.07,  Form  28. 
Pay  by  checks  salaries  to  date,  as  follows : 

Harry  K.  Sutton       $60  Michael  Donovan       $30 

Harvey  L.  Grant         50  Daniel  L.  Coon  48 

Geo.  W.  Ainsley       $40 

Write  the  checks  and  have  them  approved.    Charge  Expense  in  the  cashbook. 
Enter  the  five  checks  as  one  item. 

July  30 

Your  acceptance  of  July  15  in  favor  of  Stoddard  &  Co.,  made  payable 
at  the  bank,  has  been  charged  to  your  account. 

Make  the  entries  in  the  cashbook  and  the  check  book.    Mark  the  note  Paid  in 
the  bill  book. 

The  reason  for  charging  notes  to  a  depositor's  account  is  set  forth  on  page  169. 


Closing  the  Work  for  July 

The  student  should  now  proceed  to  close  the  month's  work  as  follows : 

1.  The  monthly  bank  statement  should  be  made. 

2.  Prove  the  cash,  and  balance  and  post  the  cashbook.    (See  model, 
pages  144  and  145.) 

In  posting  from  the  cashbook  observe  the  following : 

a.  In  debiting  or  crediting  a  personal  account  when  a  discount  has  been  allowed, 
be  guided  by  the  following  form  : 

Williams,  Dowd  &  Co. 


19— 
July 


Discount 
N.Y.  draft 


42 
2058 


19— 

9 

2100 

June 
July 

28 
30 
15 

LB. 
LB. 
LB. 


2100 

592 

1241 


60 
60 


SET  V.   JOBBING  FURNITURE  175 

h.  Post  only  the  totals  of  the  Merchandise  Discount  columns.  The  total  of  the 
column  on  the  left  side  should  be  posted  to  the  debit  of  Merchandise  Discount  in  the 
ledger,  because  that  column  shows  the  aggregate  discounts  allowed  to  others  for 
prepaying  their  bills  during  the  month  of  July.  The  total  of  the  column  on  the  right 
side  should  be  posted  to  the  credit  of  Merchandise  Discounts,  because  that  column 
shows  the  aggregate  discounts  allowed  to  you  for  prepaying  bills  during  the  month 
of  July. 

3.  In  posting,  allow  one  page  for  your  account,  one  half  page  each  for 
all  property  accounts,  and  one  third  of  a  page  for  all  accounts  receivable 
and  all  accounts  payable. 

Accounts  Receivable  is  a  term  applied  to  the  total  amount  due  the  business  on 
personal  accounts ;  Accounts  Payable  is  a  term  applied  to  the  total  amount  owed  by 
the  business  on  personal  accounts.    (The  Proprietor's  account  is  not  included.) 

These  terms,  Accounts  Receivable  and  Accounts  Payable,  are  to  be  used  in  mak- 
ing trial  balances  and  statements  in  subsequent  work ;  the  result  of  using  them  is 
to  shorten  both  the  trial  balance  and  the  statement. 

Another  advantage  of  using  the  terms  suggested  in  the  preceding  paragraph  is  to 
give  information  in  concrete  form.  The  important  fact  shown  by  these  accounts  in 
the  statements  is  the  amount  due  the  business  on  account,  and  the  amount  owed  by 
the  business  on  account,  as  single  items,  rather  than  as  a  list  of  the  individual  debtors 
and  creditors. 

Information  presented  in  concrete  form  is  always  a  desirable  feature  in  book- 
keeping. 

Note.  Blank  ruled  pages  are  provided  at  the  beginning  of  the  ledger  for  an  index. 
Observe  the  following  directions  In  preparing  the  index. 

List  all  titles  from  the  ledger  alphabetically. 

In  each  Individual  name  write  first  the  surname  and  then  the  Christian  name ;  for 
example,  Burton,  John  L. 

Illustrations  for  writing  firm  names:  Brlghtwood  &  Co.,  John  H.  ;  Cobb,  Bates  &  Co. ; 
Sherwood  &  Son,  Henry  L. 

Write  on  every  other  line,  and  place  the  page  number  of  the  account  immediately  after 
the  name. 

When  an  account  is  transferred  to  a  new  page  in  the  ledger,  the  number  of  this  page 
should  be  written  just  after  the  number  of  the  page  on  which  the  account  was  first 
written,  as  follows  :  Merchandise,  4,  76,  etc.  The  last  number  Indicates  the  page  on  which 
the  open  account  may  be  found,  and  the  series  of  page  numbers  enables  the  bookkeeper 
to  refer  to  any  page  on  which  the  account  stands. 

Any  new  accounts  that  may  be  opened  in  the  ledger  should  be  written  in  the  index 
at  once. 

4.  Rule,  foot,  and  post  the  sales  book  and  the  invoice  book. 

5.  Post  the  journal. 

6.  Prove  the  bill  book. 

Note.  To  prove  the  bill  book,  find  the  total  of  the  uncanceled  Bills  Receivable.  This 
sum  should  agree  with  the  balance  of  the  Bills  Receivahle  account  In  the  ledger. 

In  like  manner  find  the  total  of  the  unredeemed  Bills  Payable,  and  this  sum  should 
agree  with  the  balance  of  the  Bills  Payable  account  in  the  ledger. 


176 


BOOKKEEPING 


7.  Prepare  monthly  statements  of  the  customers'  accounts.  Place 
them  in  envelopes  properly  addressed  and  hand  them  in  for  approval. 
(See  form  for  statement,  page  178.) 

8.  Take  a  trial  balance  of  the  balances  of  the  ledger  accounts  and  hand 
it  to  the  instructor  for  approval. 

9.  Inventory  of  stock  was  completed  by  Harvey  L.  Grant  and  Harry 
K.  Sutton  yesterday.  The  following  are  their  figures.  Copy  in  the  journal 
in  the  usual  form,  using  the  buying  price  for  the  merchandise. 


Inventories, 
Merchandise : 

5  #3116  A.  Card  Tables 
17  #2546  A.  Library  Eockers 

4  #693  Antique  Wardrobes 
25  #635  Brass  Bedsteads 

10  #16  B  Brass  Easels 
150  #15  Cane-seat  Dining  Chairs 

5  #59  A  Cheval  Glasses 
10  #71  A  Child's  Cribs 
10  #20  Corner  Chairs 

9  #16  A  C.  Dining-room  Sets 
15  #10  China  Closets 
17  #572  Drawing-room  Suites 
12  #3016  Fancy  Kockers 
12  #36  B  Gentleman's  Chiffonien 
10  #6387  Hall  Settles 
250  #16  K  L.  Dining  Chairs 

5  #169  c  Library  Tables 


July  31,  19 — 

10  pr.  #91  Lace  Curtains 

5  #16  L.  Dressing  Cabinets 
19  #50  M.  Parlor  Tables 
.20  #626  M.  Office  Chairs 
10  #396  M.  Hall  Stands 
2  #89  M.  Chamber  Sets 
7  #2229  0.  Dining  Tables 
12  #73  Oak  Writing  Desks 
5  #68  Oak  Bookcases 
5  #20  D  Parlor  Cabinets 
10  #57  Reclining  Couches 
12  #73  Sofa  Beds 
5  #5926  S.  Book  Cabinets 
J         20  #65  Turkish  Rockers 

24  #27  c  W.-wire  Mattresses 
24  #16  Wool  Mattresses 
12  #495  W.  I.  Bedsteads 


Office  Fixtures : 

Cost 

$450. 

Depreciation 

4.50     1445.50 

Horse  and  Wagon  : 

Cost 

|450. 

Depreciation 

45.         $405. 

Real  Estate 

17000. 

Expense : 

Unexpired  Insurance 

|145. 

10.  Make  the  usual  statements  of  losses  and  gains,  and  of  resources 

and  liabilities. 

SET  V.   JOBBING  FURNITURE  177 

The  form  of  the  loss  and  gain  statement  is  changed  for  this  set.    The 
following  suggests  the  form  to  be  used: 


Statement  of  Losses  and  Gains,  July  31, 


Mdse. 

Mdse. 

Freight  and  Drayage 

Mdse. 

Mdse. 

Gain  on  Mdse. 

Gain  on  Mdse. 
Mdse.  Disc. 
Mdse.  Disc. 
Interest 
Interest 
Expense 
Expense 
Coll.  and  Exch. 
Office  Fixtures 
Office  Fixtures 
Horse  and  Wagon 
Horse  and  Wagon 
Net  Gain 


On  hand  July  1 

Bought  during  July 

Bill  for  July 

Sales  for  July 

On  hand,  July  31,  per  inv. 

Carried  below 


From  above 
On  purchases 
On  sales 
Allowed  to  us 
Allowed  by  us 
Cost,  Dr. 
Unearned  ins. 
Paid 
Cost,  Dr. 
Inventory 
Cost 

Inventory 
For  July 


150.20 

90.20 

25.50 

9.50 


490. 
100. 


430. 
425. 


250. 
224.50 


7500 

9200 

400 


1241 


18341 


390 
2 


25 

894 


1317 


9650 
8690 


18341 


60 
16 


1317 


50 
50 


The  statement  of  resources  and  liabilities  is  to  be  made  in  the  same  form  as  in 
the  previous  sets. 

11.  Make  out  a  statement  proof  or  verification. 
Statement  Proof,  July  31,  19 — 


Student's  investment 

Student's  withdrawals 

Student's  net  gain  per  statement 

Student's  present  worth  per  statement 

250 
6644 

50 

6000 
894 

50 

6894 

50 

6894 

50 

12.  Hand  the  statements  and  the  proof  of  statement  to  the  instructor 
for  approval. 

13.  If  the  statements  and  the  proof  are  correct,  close  the  accounts 
showing  loss  and  gain,  and  then  show  the  proprietor's  present  worth. 

14.  Compare  the  check  book  with  the  monthly  bank  statement. 


178 


BOOKKEEPING 


HOW  TO  COMPARE  THE  CHECK  BOOK  WITH  THE  MONTHLY 
BANK  STATEMENT 

1.  Arrange  the  canceled  checks  in  the  order  of  their  numbers. 

2.  Compare  each  canceled  check  with  the  corresponding  stub ;  if  they  agree  as 
to  the  number,  the  date,  the  amount,  to  whom  given  and  for  what  purpose,  place  a 
large  check  mark  on  the  stub. 

3.  If  all  the  stubs  are  checked,  the  balance  shown  by  the  check  book  will  agree 
with  the  balance  shown  by  the  monthly  bank  statement. 

4.  If  the  balances  do  not  agree,  find  the  total  of  the  stubs  not  checked.  This 
sum  should  equal  the  difference  between  the  check  book  and  the  balance  shown 
by  the  monthly  bank  statement. 

Note.  If,  at  the  time  of  making  this  comparison,  any  outstanding  checks  of  a  pre- 
vious month  have  been  returned,  they  must  be  checked  with  the  stubs  from  which  they 
were  detached. 

15.  Place  the  canceled  checks  in  the  Paid  Bills  envelope. 

16.  Pass  all  books  to  the  instructor  for  approval. 


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REVIEW  EXERCISES  179 

EXERCISE  58 

A  Written  Review 

The  following  review  exercises  are  suggested : 

1.  Journalize  orally   or   in  writing  each  transaction  in  the   month 
of  July. 

All  amounts  may  be  omitted,  as  the  value  of  the  exercises  is  in  determining 
debits  and  credits. 

2.  Make  the  following  opening  entries,  referring  to  pages  137  and  138 
to  determine  the  correct  form  of  entry: 

Student  begins  business  this  day  with  the  following  resources  and 
liabilities : 

a.  Cash  in  drawer,  f  231.40 

Deposit  in  First  National  Bank,  |1674.50 
Stock  of  merchandise  valued  at  |9645.50 
The  following  owe  you  on  account : 

Henry  A.  Pell,  |67.50 

Morris  &  Co.,  |253.10 

M.  M.  Bell,  $167.25 

Amos  T.  Young,  |76.45 
You  owe  the  following  on  account : 

Barber  &  Co.,  $56.75 

Young  &  Brown,  |100.50 

Thos.  L.  Parr,  $25.25 

h.  Cash  in  drawer,  $325 

Deposit  in  The  Union  Bank,  $2365.10 
Store  and  lot  valued  at  $4200 
Stock  of  merchandise  valued  at  $11,457.20 
The  following  owe  you  on  account : 

Warren  &  Son,  $176.25 

John  K.  Lamb,  $200 

C.  H.  Hartman,  $423.50 

D.  B.  Vance,  $153.95 

You  owe  the  following  on  account : 

Marshall  &  Co.,  $235 

Henry  Marvel,  $310 

Chas.  L.  Burt,  $65.70 
You  hold  notes  against  the  following : 

H.  T.  Inman,  $125 ;  interest  accrued  for  60  da. 

L,  L.  Pond,  $250 ;  interest  accrued  for  30  da. 

Mason  &  Son,  $230 
You  have  the  following  notes  outstanding : 

R.  N.  Banks,  $200 ;  interest  accrued  for  45  da. 

T.  S.  Little,  $100 ;  interest  accrued  for  75  da. 

Alden  &  King,  $75 


180 


BOOKKEEPING 


3.  Make  the  usual  statements  from  the  following  trial  balances 


a.  John  A.  Smart,  Prop. 
Cash 

Merchandise 
Expense 
Real  Estate 
Bills  Receivable 
Accounts  Receivable 
Accounts  Payable 
Bills  Payable 
Interest 

Merchandise  Discount 
Office  Fixtures 
Horse  and  Wagon 


$125. 

1165.50 

7796.25 

250.50 
3005.20 

270.45 
1256.10 


42.10 


150. 
200. 


$10500. 


2645.50 

964.25 

61.95 

89.40 


$14261.10 

$14261.10 

Inventories  : 

Merchandise 

$9857.50 

Real  Estate 

3000. 

Expense 

25.50 

Office  Fixtures 

145. 

Horse  and  Wagon 

190. 

h.  L.  S.  Woods,  Prop. 

$150. 

$12500. 

Cash 

1346.20 

Merchandise 

9865.45 

Expense 

265. 

Real  Estate 

2500. 

Office  Fixtures 

210.50 

Horse  and  Wagon 

225. 

Bills  Receivable 

265.70 

Bills  Payable 

826.55 

Accounts  Receivable 

1950.75 

Accounts  Payable 

3625.40 

Interest 

75.85 

Merchandise  Discount 

97.50 

$16951.95 

$16951.95 

Inventories  (Resource)  : 

Merchandise  $12345.25 

Expense  43.50 

Real  Estate  2500. 

Office  Fixtures  197.50 

Horse  and  Wagon  209.75 

Inventory  (Liability)  : 

Merchandise,  unpaid  freight  bill  $110.40 

Note.  The  liability  inventory  is  treated  in  each  statement  in  just  the  reverse  way 
from  the  resource  inventory,  —  as  a  liability,  in  the  resource  and  the  liability  statement. 
In  the  loss  and  gain  statement  it  is  subtracted  from  the  resource  inventory  before  finding 
the  gain  on  merchandise. 


SET  V.   JOBBING  FURNITURE 


181 


PARTNERSHIP 

The  work  for  August  is  a  continuation  of  the  work  in  July. 

You  are  desirous  of  extending  your  business,  and  not  having  suffi- 
cient capital  to  do  so,  you  have  decided  to  enter  into  a  partnership 
agreement  with  Harvey  L.  Manning. 

For  the  resources  enumerated  below  you  admit  Harvey  L.  Manning 
as  an  equal  partner  in  your  business. 

Draw  up  articles  of  copartnership  between  yourself  and  Manning, 
embodying  the  following  conditions.    (See  Form  V,  Appendix  F.) 

1.  The  firm  name  shall  be  Student  &  Co. 

2.  Student  shall  contribute  the  net  resources  shown  by  his  July  state- 
ment of  resources  and  liabilities. 

3.  Manning  shall  invest : 


Cash 

Merchandise 

Account  with  Foley  Bros,  due  him 


$7000 
1500 
5725 


4.  Each  partner  shall  devote  his  entire  time  to  the  business. 

5.  Neither  partner  shall  engage  in  any  other  business. 

6.  The  gains  and  the  losses  shall  be  divided  equally. 

7.  The  partnership  shall  continue  for  two  years  unless  sooner  dis- 
solved by  mutual  consent. 

Hand  the  articles  of  copartnership  to  the  instructor  for  criticism.    If 
they  are  correct,  he  will  sign  for  Harvey  L.  Manning. 


Model  for  Briefing 


Articles  of  Copartnership 

between 

Student 

and 

Harvey  L.  Manning 

Aug.  1,  19 — 


Make  a  copy  of  the  July  statement  of  resources  and  liabilities,  attach 
it  to  the  articles  of  copartnership,  fold  the  sheets  together,  and  in  the 
outer  right-hand  corner  at  the  top  brief  as  shown  in  the  Model  for 
Briefing  on  this  page. 


182  BOOKKEEPING 

Note.  Some  business  men  prefer  to  make  the  reference  to  investments  in  the  articles 
of  copartnership  cover  merely  the  net  amounts  invested  in  the  business  by  each  partner, 
and  then  transfer  all  rights  and  interests  in  goods  and  personal  property  by  means  of  a 
bill  of  sale.  However,  if  the  articles  of  copartnership  are  drawn  up  in  accordance  with 
the  above  directions,  the  bill  of  sale  is  wholly  unnecessary.  Each  partner  should  receive 
a  copy  of  the  articles  of  copartnership. 

Keal  property  cannot  be  transferred  by  the  ordinary  bill  of  sale  nor  by  articles  of 
copartnership ;  a  deed  is  necessary.  In  order  not  to  multiply  complicated  forms  at  this 
point  of  the  work,  it  is  assumed  that  the  student's  real  estate  has  been  transferred  by 
a  warranty  deed  drawn  this  day  by  his  attorney,  Fred  V.  Smith,  and  placed  on  file  in 
the  oflfice  of  the  new  firm. 

Ordinarily,  a  business  man  does  not  draw  up  his  own  warranty  deeds,  articles  of 
copartnership,  etc.,  but  employs  an  attorney. 

When  any  change  in  the  personnel  of  a  business  occurs,  all  who  have  had  dealings 
with  the  house  should  be  notified  promptly,  by  means  of  circular  letters  or  otherwise.  In 
this  case  it  is  assumed  that  these  letters  have  been  written  and  mailed. 


Incoming  Business  Forms  for  August 

In  this  connection  the  student  is  referred  to  the  instructions  given  for  the  business 
forms  in  the  month  of  July,  page  151. 

Remember  that  the  business  is  now  conducted  under  the  firm  name  of 
Student  &  Co. 

Form  29.  Check  of  Harvey  L.  Manning,  dated  City,  Aug.  1,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $7000. 

Form  30.  Invoice  of  J.  K.  Levy  &  Co.,  New  York  City,  dated  July  31. 
Terms:  cash,  less  2%. 

15  #693  Antique  Wardrobes 
Deduct  the  discount  from  the  amount  of  the  invoice ;  receipt  it,  per  your  initials. 

Form  31.  New  York  draft,  dated  Olean,  Aug.  1,  drawn  by  The  Union 
Bank  of  Olean,  on  Chemical  National  Bank  of  New  York,  in 
favor  of  M.  L.  Covey  &  Co.,  for  |283.72,  W.  D.  Byron, 
Cashier.    Transferred  to  Student  &  Co.  by  full  indorsement. 

Form  32.  Draft  on  your  firm  by  Stoddard  &  Co.,  in  favor  of  Curry, 
Browning  &  Co.,  dated  City,  Aug.  3,  payable  at  10  days' 
sight  for  $1500. 

Form. 33.  Invoice  of  Cobb,  Bates  &  Co.,  City,  dated  Aug.  3.  Terms: 
3/10,  net  30  da.    Items  as  follows : 

25  #5932  Empire  Toilet  Tables  18  #1008  Oak  Sideboards 

25  #76  A  Oak  Chamber  Sets 

Remember  that  all  goods  bought  are  now  billed  to  your  firm. 


k 


SET  V.    JOBBING  FURNITURE  183 

Form  34.  Invoice  of  Derby  Mfg.  Co.,  City,  dated  Aug.  3.  Terms :  draft 
at  10  da.  for  the  amount,  less  2%.    Items  as  follows : 

5  #16  A  Comp.  Dining-room  Sets  5  #693  Antique  Wardrobes 

10  #89  Mahogany  Chamber  Sets 

Deduct  the  2%  discount,  but  do  not  receipt  the  bill. 

Form  35.  Draft  of  Derby  Mfg.  Co.,  City,  on  your  firm,  in  favor  of  them- 
selves, for  the  net  amount  of  the  above  invoice,  dated  Aug.  3, 
payable  at  10  days'  sight. 

Form  36.  Invoice  of  C.  W.  Allen  &  Co.,  Trenton,  N.J.,  dated  Aug.  3. 
Terms :   2/30,  net  60  da.    Items  as  follows : 

30  pr.  Blue  Chenille  Curtains  20  pr.  #91  Lace  Curtains 

Form  37.  Check  of  David  E.  Teeter,  City,  dated  Aug.  6,  drawn  on 
Traders  National  Bank,  in  favor  of  Student  &  Co.,  for 
$589.30. 

Form  38.  Bill  of  Ward,  Macey  &  Co.,  dated  City,  Aug.  6,  for  1  letter  file 
and  cabinet,  $65.    Terms :  cash. 
Receipt  the  bill. 

Form  39.  Bill  of  Tracy  Coal  Co.  to  Harvey  L.  Manning,  dated  Aug.  6, 
for  3  T.  coal  at  $5.    Terms :  cash. 

Receipt  the  bill. 

Form  40.  C.O.I),  envelope.  Data  as  follows:  Cash  inclosed,  |22.  Goods 
were  shipped  by  your  firm  to  J.  W.  Clark,  Waltham,  Aug.  5. 

Note.    Refer  to  the  note  under  Form  21,  page  153. 

Form  41.  Check   of  David  E.  Teeter,   City,   dated   Aug.  9,  drawn   on 

Traders  National  Bank,  in  favor  of  your  firm,  for  $1248.87. 
Form  42.  New  York  draft,  dated  City,  Aug.  11,  drawn  by  The  Union 

Bank,  in  favor  of  your  firm,  on  Chemical  National  Bank, 

New  York,  for  $438.55,  Chas.  H.  Palmer,  Cashier. 
Form  43.  Sight  draft  of  S.  T.  Udell  &  Co.  on  your  firm  for  $479.50,  dated 

Chicago,  111.,  Aug.  10 ;  drawn  payable  to  W.  D.  Lapham. 
Form  44.  Check  of  J.  E.  Bender,  dated  Troy,  Aug.  11,  drawn  on  Traders 

National  Bank,  in  favor  of  your  firm,  for  $920.95.  ■ 
Form  45.  Draft  of  J.  O.  Moran,  drawn  on  your  firm,  in  favor  of  Geo.  L. 

Jones,  dated  City,  Aug.  13,  payable  in  60  da.  from  date,  for 

$1900. 
Form  46.  Check  of  Walker,  Brown  &  Co.,  dated  Albany,  Aug.  12,  drawn 

on  Traders  National  Bank,  in  favor  of  your  firm,  for  $712.95. 


184  BOOKKEEPING 

Form  47.  Check  of  H.  B.  Claflin  &  Co.,  dated  City,  Aug.  IB,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $400. 

Form  48.  Invoice  of  C.  W.  Allen  &  Co.,  Trenton,  N.J.,  dated  Aug.  14. 
Terms:  2/30,  net  60  da.    Items  as  follows: 

50  #176  c  Piano  Chairs  20  #6387  Hall  Settles 

25  #835  Music  Cabinets  50  #170  English  Clothes  Poles 

Form  49.  Invoice  of  Cobb,  Bates  &  Co.,  City,  dated  Aug.  22.  Terms : 
3/10,  net  30  da.    Items  as  follows : 

25  #16  L.  Dressing  Cabinets  25  #36  b  Gentleman's  Chiffoniers 

25  #5932  Empire  Toilet  Tables 

Form  50.  Invoice  of  Fowler  Furniture  Co.,  Rochester,  dated  Aug.  22. 
Terms:  cash,  less  2%.    Items  as  follows: 

10  #245  Cedar  Chests  10  #2229  Oak  Dining  Tables 

10  #687  Ornamental  Tables  15  #17  a  Roman  Chairs 

Deduct  the  discount  arid  receipt  the  bill. 

Form  51.  New  York  draft,  dated  Springfield,  Aug.  24,  drawn  by  The 
Union  Bank  of  Springfield,  on  Chemical  National  Bank,  New 
York,  in  favor  of  G.  H.  Ingalls  &  Co.,  for  |732.35,  A.  R.  Shef- 
field, Cashier.    Transferred  to  your  firm  by  full  mdorsement. 

lorm  52.  Check  of  Samuel  W.  Bradley,  Bedford,  dated  Aug.  26,  drawn 
on  Traders  National  Bank,  in  favor  of  your  firm,  for  |1587.60. 

Form  53.  Note  of  Chas.  B.  Sherman,  Rochester,  dated  Aug.  25,  at  30  da., 
with  interest  at  6%,  in  favor  of  your  firm,  for  $352.69. 

Form  54.  Draft  of  Traders  National  Bank,  Bangor,  dated  Aug.  26,  drawn 
on  Chemical  National  Bank,  New  York,  in  favor  of  your 
firm,  for  |454.06,  W.  H.  Gould,  Cashier. 

Form  55.  Invoice  of  William  Leavens  &  Co.,  New  York,  dated  Aug.  27. 
Terms:  sight  draft  in  10  da.,  for  the  amount  of  the  bill,  less 
2%.    Items  as  follows: 

25  #5926  Secretary  Book  Cabinets       40  #68  Oak  Bookcases 
50  #396  Mahogany  Hall  Stands 

Form  56.  Bill  of  the  Metropolitan  Carting  Co.,  City,  dated  Aug.  31 
Items  as  follows: 

Aug.    1,  Freight  and  Cartage,  $24.25 

16,  Freight  and  Cartage,  57.50 

22,  Cartage,  8.50 

23,  Freight  and  Cartage,  43.50 
30,  Freight  and  Cartage,  139.50 

Receipt  the  bill.    - 


SET  V.   JOBBING  FURNITURE  185 

Memoranda  of  Transactions  for  August 

August  1 

Draw  a  check  in  favor  of  Student  &  Co.,  on  The  Union  Bank,  for  the 
amount  of  the  balance  on  deposit.  Have  the  check  approved,  and  place 
it  in  the  Business  Cash  envelope. 

This  check  is  drawn  in  order  that  the  bank  account  with  the  student  may  be 
closed.    Presently  this  check  will  be  deposited  to  the  credit  of  the  new  firm. 

Receive  Harvey  L.  Manning's  check  on  Traders  National  Bank, 
for  the  amount  of  his  cash  investment.  Form  29. 

Carry  the  July  balance  to  a  new  page  in  the  cashbook.  On  the  first  line  below 
the  balance,  credit  Manning  for  his  cash  investment,  $7000. 

Indorse  the  two  checks  on  hand  and  deposit  them  in  The  Union  Bank 
in  the  name  of  the  new  firm.  Above  the  student's  name  on  the  pass  book 
write  the  firm  name.  Make  a  memorandum  in  the  journal,  setting  forth 
the  change  in  the  personnel  of  the  business.  Make  a  journal  entry  for 
the  merchandise  and  the  personal  account  invested  by  Manning. 

Remember  to  check  every  cash  item  that  is  entered  in  both  the  journal  and  the 
cashbook. 

Your  bank  reports  that  the  draft  on  P.  R.  Brown,  attached  to  a  bill 
of  lading,  has  been  collected.    Collection,  |1. 

Have  the  amount  entered  in  the  pass  book,  and  record  it  in  the  check  book. 
The  entry  in  the  cashbook  is  the  same  as  the  entry  of  the  C.O.D.  shipment  to 
Lyman,  July  22.    Debit  Collection  and  Exchange  for  the  $1  collection. 

The  Metropolitan  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  J.  K.  Levy  &  Co.  on  July  24,  Form  30. 
Draw  a  cash  check  for  office  expenses,  |25. 
Ask  for  $5  in  change.    Enter  in  the  check  book  only. 

Telegraph  C.  W.  Allen  &  Co.,  Trenton,  N. J.,  ordering : 

20  pr.  Blue  Chenille  Curtains  20  pr.  #91  Lace  Curtains 

Limit  the  message  to  fifteen  words.   Pay  the  charges  in  cash,  60^. 

The  draft  drawn  on  Walker,  Brown  &  Co.,  July  2,  and  left  with  the 
bank  for  collection,  has  been  paid.    Collection,  75^. 

The  bank  teller  will  make  the  proper  record  in  your  pass  book.  Enter  the  amount 
in  the  check  book  and  the  cashbook. 

Make  the  proper  record  in  the  bill  book. 


186  BOOKKEEPING 

August  2 

J.  E.  Bender,  Troy,  sends  the  following  order.  Fill  the  order  at  the 
prices  given  herewith  : 

50  #15  C.  Dining  Chairs  at  |2.25         5  #495  W.  Iron  Bedsteads  at  |5 
10  #16  Wool  Mattresses  at  $4  5  #m  Turkish  Rockers  at  $24.75 

50  #16  K  L.  Dining  Chairs  at  |9.50      3  #73  Sofa  Beds  at  |38 
3  #626  Mahogany  Office  Chairs  at  $16.50 

Terms :  3/5,  2/10,  net  30  da. 
M.  L.  Covey  &  Go.,  Olean,  order : 

3  #396  Mahogany  Hall  Stands  2  #68  Oak  Bookcases 

3  #20  Corner  Chairs 

Fill  the  order.    Terms:  cash,  less  3%. 

Deduct  the  discount  on  the  invoice  and  in  the  sales  book.  Prepare  the  bill  of 
lading  as  usual. 

A  New  York  draft  was  inclosed  in  payment  of  the  order.  Form  31. 
Make  a  cashbook  entry  for  the  draft. 

Note.  But  few  special  instructions  will  be  given  to  the  student  for  entering  the  trans- 
actions of  this  month.  He  is  supposed  to  be  sufficiently  familiar  with  the  different  books 
and  the  various  transactions  recorded  therein  to  proceed  without  a  guide.  If  in  doubt 
at  any  time,  he  should  consult  the  instructor. 

Place  the  following  orders  over  the  telephone : 
Cobb,  Bates  &  Co.,  City: 

25  #5932  Empire  Toilet  Tables  25  #76  a  Oak  Chamber  Sets 

18  #1008  Oak  Sideboards 

Derby  Manufacturing  Co.,  City : 

10  #89  Mahogany  Chamber  Sets  5  #693  Antique  Wardrobes 

5  #16  A  Complete  Dining-room  Sets 

Note.  Some  memorandum  should  be  made  of  each  order  placed  as  above.  When 
these  orders  are  frequent,  a  special  order  book  is  used.  In  this  set  the  memoranda  for 
all  orders  placed  over  the  telephone  may  be  written  on  a  sheet  of  paper  and  filed  with 
the  incoming  papers. 

August  3 

Draw  a  draft,  payable  at  30  days'  sight,  on  J.  E.  Bender,  for  the  amount 
you  owe  W.  H.  Stearns  &  Co. 

Make  the  required  journal  entry. 

Write  a  letter  to  W.  H.  Stearns  &  Co.  and  inclose  the  draft.  Also,  write  a  letter 
to  J.  E.  Bender,  informing  him  of  the  draft  drawn.  Refer  to  similar  letters  under 
Julyl.  ., 


SET  V.   JOBBING  FUENITUEE  187 

Accept,  payable  at  The  Union  Bank,  Stoddard  &  Co.'s  draft,  on  your 
firm,  in  favor  of  Curry,  Browning  &  Co.,  drawn  at  10  days'  sight,  for 
$1500,  Form  32. 

Make  the  journal  entry.    Record  the  draft  in  the  bill  book,  and  then  hand  it  in. 

You  have  received  the  goods,  ordered  of  Cobb,  Bates  &  Co.  on  Aug.  2, 
Form  33. 

Goods  ordered  of  Derby  Manufacturing  Co.  have  been  delivered. 
Form  34. 

Accept  the  draft  which  they  inclosed,  payable  at  The  Union  Bank, 
Form  35. 

The  goods  ordered  of  C.  W.  Allen  &  Co.,  on  Aug.  1,  have  been 
received.  Form  36. 

August  5 

A  telegraphic  order  has  been  received  from  Henry  L.  Miller,  Provi- 
dence, for : 

15  #5932  Empire  Toilet  Tables       15  #1008  Oak  Sideboards 

Fill  the  order,  subject  to  the  order  of  The  Union  Bank,  less  2%. 

Deduct  the  discount  on  the  invoice,  and  treat  in  the  same  manner  as  the  ship- 
ment to  P.  R.  Brown,  July  19. 

A  telegraphic  order  has  been  received  from  J.  W.  Clark,  Waltham,  for : 

2  pr.  #91  Lace  Curtains  2  pr.  Blue  Chenille  Curtains 

The  goods  are  to  be  shipped  by  express  C.O.D. 
Treat  the  same  as  the  order  of  Chas.  B.  Lyman,  July  17. 

David  E.  Teeter,  City,  has  given  you  the  following  order  over  the 
telephone : 

Fill  the  order  at  the  prices  given  herewith : 

5  #5932  E.  Toilet  Tables  at  $50      10  #693  Antique  Wardrobes  at  |25.75 

3  #396  M.  Hall  Stands  at  |65  3  #1008  Oak  Sideboards  at  $195 

Terms :  3/5,  1/30,  net  60  da. 

August  6 

Receive  of  David  E.  Teeter  his  check,  for  the  invoice  of  July  27,  less 
1%,  Form  37. 

Pay  by  check  Ward,  Macey  &  Co.'s  bill  for  a  letter  file  and  cabinet  for 
use  in  the  office,  |65,  Form  38. 

Charge  Office  Fixtures. 

Pay  by  check  Charles  B.  Hanley  for  sundry  repairs,  $10.50. 


188  BOOKKEEPING 

Pay  by  check  Tracy  Coal  Co.'s  bill  for  coal  for  private  use  of  Harvey 
L.  Manning,  $15,  Form  39. 

Leave  J.  E.  Farley's  acceptance,  received  July  10,  with  the  bank  for 
collection. 

Deposit  the  check  and  the  New  York  draft  on  hand. 

August  8 

Acceptance  in  favor  of  W.  H.  Stearns  &  Co.  is  due  to-day,  payable 
at  the  bank. 

In  the  month  of  July  our  notes  and  acceptances  payable  at  the  bank 
were  charged  to  the  depositor's  account.  This  matter  was  explained 
under  July  13.  Hereafter  such  notes  and  acceptances  will  be  paid  by 
check,  the  check  being  made  payable  to  the  payee  of  the  note  or  the 
acceptance. 

Issue  a  check  in  payment. 

Enter  in  the  cashbook,  and  make  the  usual  record  in  the  bill  book. 

Write  a  letter  to  C.  W.  Allen  &  Co.,  Trenton,  N.J.,  ordering  the 
following : 

60  #176  c  Piano  Chairs  25  #835  Music  Cabinets 

50  #170  English  Clothes  Poles     20  #6387  Hall  Settles 

August  9 

Benj.  P.  Freeman  &  Co.,  City,  order: 

5  #10  China  Closets  10  #16  Wool  Mattresses 

5  #495  White  Iron  Bedsteads         5  #65  Turkish  Kockers 
2  #5926  Secretary  Book  Cabinets 

Fill  the  order.    Terms:  sight  draft  in  10  da.  for  the  amount,  less  3%. 

Treat  in  the  same  way  as  their  order  of  July  2. 

Walker,  Brown  &  Co.,  Albany,  send  in  the  following  order.  Fill  the 
order  at  the  prices  given  herewith : 

5  #89  M.  Chamber  Sets  at  |80       5  pr.  B.  Chenille  Curtains  at  $5 
15  pr.  #91  Lace  Curtains  at  $6        2  #16  a  C.  Dining-room  Sets  at  $110 

Terms :  3/5,  net  30  da. 

J.  B.  Cox  &  Co.,  Somerville,  order: 

7  #572  Drawing-room  Suites  3  #59  a  Cheval  Glasses 

5  #3016  Fancy  Rockers  12  #2546  Ant.  Library  Eockers 

Fill  the  order.    Terms :  20-da.  draft  for  the  amount  of  the  bilL 

Treat  in  the  same  way  as  the  order  of  Walker,  Brown  &  Co.,  July  2. 

Receive  returns,  for  C.O.D.  shipment  of  Aug.  5,  Form  40. 


SET  V.   JOBBING  FURNITURE  189 

August  10 

Receive  of  David  E.  Teeter  his  check  for  the  amount  of  the  bill  of 
Aug.  5,  less  3%,  Form  41. 

August  11 
Your  bank  has  collected  J.  E.  Farley's  acceptance  due  to-day. 
Take  your  pass  book  to  the  bank  and  receive  credit  for  the  amount. 

Leave  the  acceptance  of  Rogers,  Peet  &  Co.  with  the  bank  for  collec- 
tion ;  also  deposit  |20  currency  and  the  check  on  hand. 

You  receive  frequent  calls  for  a  line  of  furniture  manufactured  by 
the  Fowler  Furniture  Co.,  Rochester.  From  their  catalogue  you  have 
made  the  following  selections : 

10  #687  Ornamental  Tables  10  #245  Cedar  Chests 

10  #2229  Oak  Dining  Tables  15  #17  a  Roman  Chairs 

Write  a  letter,  ordering  the  above  goods  and  inclosing  a  New  York 
draft  to  cover  the  amount,  less  2%.  Give  references  and  some  informa- 
tion about  the  volume  of  your  business. 

The  volume  of  business  is  shown  by  the  total  sales. 

Write  the  check  and  receive  the  draft,  Form  42.  The  bank  makes 
no  charge  for  the  draft. 

August  12 

Pay  by  check  S.  T.  Udell  &  Co.'s  sight  draft  on  you,  in  favor  of 
W.  D.  Lapham,  |479.50,  Form  43. 

Receive  of  J.  E.  Bender,  Troy,  his  check  for  the  invoice  of  Aug.  2, 
less  2%,  Form  44. 

August  13 

Accept  J.  O.  Moran's  draft,  payable  60  da.  from  date,  in  favor  of  Geo. 
L.  Jones,  for  |1900,  Form  45. 

Receive  of  Walker,  Brown  &  Co.  their  check  for  the  invoice  of  Aug.  9, 
less  3%,  Form  46. 

Receive  from  H.  B.  Claflin  &  Co.  their  check,  for  their  acceptance  due 
to-day.  Form  47. 

Make  the  following  record  in  red  ink  across  the  face  of  the  drq/?, and thenliand  it  in: 
Paid  in  full  8/13 
Student  &  Co., 

per  (^Student's  initials). 

Note.   A  canceled  draft,  note,  or  check  should  always  be  kept  and  filed  as  a  receipt. 


190  BOOKKEEPING 

Your  acceptances,  in  favor  of  Curry,  Browning  &  Co.  and  Derby 
Manufacturing  Co.,  are  due  to-day. 

Write  checks  for  the  payment  of  these  notes,  hand  them  in,  and  receive  the 
canceled  acceptances. 

August  15 

Deposit  the  checks  on  hand  and  the  currency  received  from  the  C.O.D. 
shipment  Aug.  9.    Collection  on  the  checks,  $1.50. 

Your  bank  informs  you  that  the  acceptance  of  Rogers,  Peet  &  Co., 
due  yesterday,  has  been  collected. 

Your  bank  informs  you  that  the  draft  on  Plenry  L.  Miller  has  been 
paid.    Collection,  $2. 

August  16 

The  Metropolitan  Carting  Co.  has  this  day  delivered  to  you  the  goods 
ordered  of  C.  W.  Allen  &  Co.,  on  Aug.  8,  Form  48. 

E.  F.  Green  &  Co.,  Bangor,  order  the  following.  Fill  the  order  at  the 
prices  given  herewith : 

15  #176  c  Piano  Chairs  at  $17  5  #835  Music  Cabinets  at  |5 

15  #170  E.  Clothes  Poles  at  $5.50  5  #6.387  Hall  Settles  at  $23.25 

Rumors  are  current  to  the  effect  that  the  resources  of  E.  F.  Green  &  Co.  are  in 
an  unsatisfactory  condition,  and  you  think  it  advisable  not  to  sell  them  anything 
on  account.  Prepare  the  usual  bill  of  lading.  Make  a  sight  draft  on  E.  F.  Green  & 
Co.,  in  favor  of  your  firm,  for  the  amount  of  the  invoice,  less  5%,  and  attach  it  to  the 
bill  of  lading.  Deduct  the  discount  on  the  invoice  and  in  the  sales  book.  (Refer  to 
the  comment  on  the  shipment  to  P.  R.  Brown,  July  19.) 

Indorse  the  draft  to  the  bank  to  which  it  is  to  be  sent.  Write  a  letter,  inclose 
the  draft  and  the  bill  of  lading,  and  send  it  direct  to  Traders  National  Bank,  Bangor, 
for  collection. 

E.  F.  Green  &  Co.  have  consented  to  the  terms  of  this  shipment. 

August  17 
Your  offer  to  prepay  your  acceptance  in  favor  of  Geo.  L.  Jones  is 
accepted. 

Refer  to  the  bill  book  for  all  details  regarding  this  acceptance. 
Deduct  the  discount  for  the  time  the  acceptance  has  yet  to  run,  and  write  a 
check  for  the  proceeds.    Have  the  acceptance  canceled,  and  keep  it  as  a  receipt. 

August  18 
Give  C.  W.  Allen  &  Co.  a  check  for  the  invoice  of  Aug.  14,  less  2%. 

August  19 
Take  the  draft  on  Benj.  P.  Freeman  &  Co.,  drawn  Aug.  9,  from  the 
Business  Cash  envelope,  indorse  it  properly,  and  deposit  it  in  the  bank. 


SET  V.   JOBBING  FURNITURE  191 

August  20 

Samuel  W.  Bradley,  Bedford,  sends  in  the  following  order.    Fill  the 
order  at  the  prices  given  herewith : 

5  #36  B  G.  Chiffoniers  at  $10  10  #27  c  W.-wire  Mattresses  at  |3.25 

150  #16  K  L.  Dining  Chairs  at  $9.50       50  #15  C.  Dining  Chairs  at  $2.25 

Terms :  3/5,  2/10,  net  30  da. 

G.  H.  Ingalls  &  Co.,  Springfield,  send  in  the  following  order.    Fill 
the  order  at  the  prices  given  herewith : 

5  #2546  A.  Library  Rockers  at  $12      5  #635  Brass  Bedsteads  at  $22.50 
5  #626  M.  Office  Chairs  at  $16.50        5  #572  D.  Suites  at  $100 

Terms :  3/5,  2/10,  net  30  da. 

Give  Cobb,  Bates  &  Co.  the  following  order  over  the  telephone : 

25  #36  B  Gentleman's  Chiffoniers         25  #5932  Empire  Toilet  Tables 
25  #16  Lady's  Dressing  Cabinets 

August  22 

Write  a  letter  to  William  Leavens  &  Co.,  New  York  City,  ordering  ; 

50  #396  Mahogany  Hall  Stands  40  #68  Oak  Bookcases 

25  #5926  Secretary  Book  Cabinets 

The  Metropolitan  Carting  Co.  has    delivered  the  goods  ordered  of 
Cobb,  Bates  &  Co.,  on  Aug.  20,  Form  49. 
M.  N.  Overman,  Albany,  orders : 

10  #50  Mahogany  Parlor  Tables  10  #10  China  Closets 

Fill  the  order.    Terms:  3/10,  1/30,  net  60  da. 

August  23 

Give  Cobb,  Bates  &  Co.  a  check  for  the  invoice  of  Aug.  22,  less  3%. 
•   You  and  your  partner  each  withdraw  from  the  business,  by  check,  $150. 

Hand  in  Manning's  check.    Have  yours  cashed  at  the  bank  and  put  the  currency 
into  the  Personal  Cash  envelope. 

Pay  Chas.  O.  Rigdon,  by  check,  $52.50  for  stabling  and  feeding  your 
horses.  Also  pay  James  Lundergan,  by  check,  $9.20  for  horseshoeing,  etc. 
These  are  Expense  items. 

The  Metropolitan  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  the  Fowler  Furniture  Co.  on  Aug.  11,  Form  50. 


192  BOOKKEEPING 

August  24 

Chas.  B.  Sherman,  Rochester,  sends  in  the  following  order.  Fill  the 
order  at  the  prices  given  herewith : 

5  #5932  E.  Toilet  Tables  at  $50  5  #50  M.  Parlor  Tables  at  $21.25 

Terms:  30-da.  note  with  interest,  less  1%. 

Deduct  the  discount  on  the  invoice  and  in  the  sales  book.  The  note  will  be 
received  later ;  make  no  entry  until  it  is  received. 

Take  the  sight  draft  on  Chas.  B.  Sherman,  dated  to-day,  from  your 
Business  Cash  envelope,  and  deposit  it  in  the  bank,  together  with  all  the 
cash  on  hand.    Collection  on  the  draft,  50^. 

This  draft  is  for  the  invoice  of  July  25. 
Enter  in  the  cashbook. 

August  25 

Receive  of  G.  H.  Ingalls  &  Co.  a  New  York  draft,  in  payment  of  the 
invoice  of  Aug.  20,  less  3%,  Form  51. 

August  26 

Receive  of  Samuel  W.  Bradley  his  check,  on  Traders  National  Bank,  in 
payment  of  the  invoice  of  Aug.  20,  less  2%,  Form  52. 

August  27 

Receive  of  Chas.  B.  Sherman  his  note,  dated  Aug.  25,  in  favor  of 
your  firm,  for  the  net  amount  of  the  invoice  of  Aug.  24,  Form  53. 

Receive  a  New  York  draft,  from  Traders  National  Bank,  Bangor,  for 
the  amount  of  the  sight  draft  on  E.  F.  Green  &  Co.,  Aug.  16,  less  75(^ 
collection.  Form  54. 

The  account  should  be  credited  in  the  cashbook  for  the  amount  of  the  invoice  in 
the  sales  book. 

Note.  The  amount  of  the  draft  is  the  face  of  the  invoice  less  75(^.  E.  F.  Green  &  Co. 
deducted  the  collection,  and  this  necessitates  a  charge  on  your  books  for  the  75^,  as  it  was 
paid  by  you. 

August  30 

Deposit  the  check  which  you  received  of  Samuel  W.  Bradley  on 
Aug.  26,  and  the  two  New  York  drafts  on  hand.  The  collection  on 
Bradley's  check  is  $1.50. 

Your  bank  informs  you  that  the  draft  drawn  on  J.  B.  Cox  &  Co., 
Aug.  9,  has  been  paid.    Collection,  $1. 


SET  V.   JOBBIKa  FURKITUKE  193 

The  Metropolitan  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  William  Leavens  &  Co.,  on  Aug.  22,  Form  55. 

Discount  at  The  Union  Bank  the  note  received  of  Chas.  B.  Sherman 
on  Aug.  27. 

The  bank  gives  you  credit  for  the  face  of  the  note. 

Note.  It  is  customary  for  many  banks  to  give  depositors  credit  for  the  face  of  interest- 
bearing  notes  discounted  within  a  few  days  after  they  are  made.  The  interest  is  the  com- 
pensation received  by  the  bank. 

August  31 
Give  J.  L.  Bidwell  &  Son  a  check  for  |125  for  one  carriage  horse. 
Charge  this  to  the  account  of  Harvey  L.  Manning. 

Pay  by  check  the  bill  of  the  Metropolitan  Carting  Co.,  for  freight  and 
drayage  to  date,  $273.25,  Form  56. 

Charge  Merchandise  in  the  cashbook. 

Pay  salaries  to  date  by  checks  as  follows : 

Harry  K.  Sutton     $60  Michael  Donovan     $30 

Harvey  L.  Grant       50  Daniel  L.  Coon  48 

Geo.  W.  Ainsley     $40 

Enter  these  salaries  in  the  cashbook  as  one  item. 

Closing  the  Work  for  August 

The  student  should  now  proceed  to  close  the  work  for  this  month  as 
follows : 

1.  Have  the  monthly  bank  statement  made,  and  compare  it  with  the 
check  book. 

2.  In  posting,  allow  one  third  of  a  page  for  all  new  accounts. 

As  Harvey  L.  Manning  is  now  one  of  the  proprietors,  write  his  name  on  the  lower 
half  of  page  1. 

3.  Rule,  foot,  and  post  the  sales  book  and  the*  invoice  book. 

4.  Prove  the  cash,  and  balance  and  post  the  cashbook. 

5.  Prove  the  bill  book. 

6.  Make  out  monthly  statements  for  the  customers. 

7.  Make  a  trial  balance  of  the  balances  of  your  ledger  accounts,  and 
hand  it  to  the  instructor  for  approval. 

8.  An  inventory  of  everything  on  hand  has  been  completed  by  Mr. 
Sutton.  A  statement  of  it  follows.  Copy  it  in  the  journal  in  the  usual 
way,  computing  the  value  at  cost  prices. 


194  BOOKKEEPING 

Inventories,  August  31,  19 — 
Merchandise : 

5  #3116  Antique  Card  Tables  12  #626  M.  Office  Chairs 

14  #693  Antique  Wardrobes  4  #50  M.  Parlor  Tables 

10  #16  B  Brass  Easels  54  #396  M.  Hall  Stands 

20  #635  Brass  Bedsteads  17  #89  M.  Chamber  Sets 

13  pr.  Blue  Chenille  Curtains  20  #835  Music  Cabinets 

10  #245  Cedar  Chests  25  #76  a  Oak  Chamber  Sets 

50  #15  Cane-seat  Dining  Chairs  10  #687  Ornamental  Tables 

2  #59  A  Cheval  Glasses  17  #2229  Oak  Dining  Tables 

10  #71  A  Child's  Cribs  12  #73  Oak  Writing  Desks 

7  #20  Corner  Chairs  43  #68  Oak  Bookcases 

25  #16  A  C.  Dining-room  Sets  5  #20  d  Parlor  Cabinets 

5  #572  Drawing-room  Suites  35  #176  o  Piano  Chairs 

25  #5932  Empire  Toilet  Tables  10  #57  Reclining  Couches 

35  #170  English  Clothes  Poles  15  #17  a  Roman  Chairs 

7  #3016  Fancy  Rockers  9  #73  Sofa  Beds 

32  #36  B  G.  Chiffoniers  28  #5926  Sec.  Book  Cabinets 

25  #6387  Hall  Settles  10  #65  Turkish  Rockers 

50  #16  K  L.  Dining  Chairs  14  #27  c  W.-wire  Mattresses 

5  #169  c  Library  Tables  4  #16  Wool  Mattresses 

13  pr.  #91  Lace  Curtains  2  #495  White  Iron  Bedsteads 
30  #16  Lady's  Dressing  Cabinets 

Office  Fixtures : 

Cost  $515. 

Depreciation 
Horse  and  Wagon : 

Cost 

Depreciation 
Real  Estate : 

Cost 

Depreciation 
Expense : 

Unexpired  Insurance  $130. 

9.  Make  the  statements  and  the  verification,  and  have  them  approved. 

Show  the  net  gain  as  a  total  on  the  loss  and  gain  statement,  and  the  present  worth 
as  a  total  on  the  resource^ and  liability  statement. 

10.  If  the  statements  are  correct,  close  the  ledger  as  follows : 
a.  Close  the  loss  and  gam  accounts. 
h.  Close  the  Loss  and  Grain  account  into  the  Proprietors'  account. 

In  closing  the  Loss  and  Gain  account,  remember  that  the  net  gain  is  to  be 
divided  equally  between  the  partners. 


5.15 

1509.85 

$450. 
60. 

$390. 

17000. 
350. 

16650. 

DISSOLUTIOISr  OF  PARTNERSHIP  195 

<?.  Close  the  Proprietors'  accounts. 

d.  Rule  the  personal  accounts  that  balance. 

e.  To  give  your  ledger  a  more  finished  appearance,  close  all  other 
accounts  by  Balance. 

11.  Hand  in  all  books  to  the  instructor  for  approval. 


DISSOLUTION  OF  PARTNERSHIP 

It  has  been  decided  to  dissolve  the  partnership  existing  between 
yourseK  and  Harvey  L.  Manning.  You  dispose  of  your  interest  to 
Manning  for  the  following: 

A  note  at  60  da.,  with  interest  at  6^^,  $7500. 

A  check  for  the  balance  of  your  present  worth  as  shown  by  your 
ledger  account  after  closing,  Aug.  31. 

Write  the  note  and  have  the  instructor  sign  for  Manning. 

Make  the  journal  entry,  and  then  record  the  note  in  the  bill  book. 

Write  the  check  for  the  balance  of  your  present  worth. 

Make  the  cashbook  entry.  Post  both  the  entries  to  yo>iT  account  in  the  ledger 
and  close  the  account. 

Harvey  L.  Manning  is  to  conduct  the  furniture  business  at  the  old 
stand  under  the  name  of  Harvey  L.  Mannmg.  He  is  to  have  the  net 
resources  and  assume  all  the  liabilities  of  the  old  firm. 

Draw  a  check  in  favor  of  Harvey  L.  Manning  for  the  balance  of  the 
cash  in  the  bank  in  the  name  of  the  old  firm,  and  hand  it  in. 

It  is  assumed  that  your  attorney,  Fred  V.  Smith,  has  drawn  up  the  contract  of 
sale  and  the  warranty  deed  necessary  to  transfer  the  title  to  all  the  chattels  and 
the  real  estate  to  Manning.  These  documents,  it  is  assumed,  are  on  file  with  other 
important  papers. 

Consequences  of  Dissolution  of  Partnership.  The  direct  consequence 
of  a  dissolution  of  partnership  is  the  necessity  of  taking  effectual 
steps  to  close  the  partnership  affairs.  Some  disposition  must  always 
be  made  of  the  partnership  effects.  Sometimes  articles  of  copartner- 
ship provide  that  property  on  hand  shall  be  taken  at  dissolution  by 
one  of  the  partners  according  to  a  prescribed  mode,  and  in  that  case 
the  business  may  be  continued  without  interruption.  In  this  case  there 
was  no  such  agreement,  but  the  partners  between  themselves  entered 
into  an  arrangement  whereby  Manning  continues  the  business  and 
Student^  for  a  sufficient  consideration,  consents  to  withdraw. 


196  BOOKKEEPING 

Notice  of  Dissolution.  A  dissolution  of  partnership,  so  far  as  it  con- 
cerns its  own  members,  may  be  immediate,  but  with  reference  to  the 
public  the  element  of  notice  requires  consideration. 

When  Notice  is  Unnecessary.    A  notice  of  dissolution  is  unnecessary : 

1.  When  a  partnership  expires  by  its  own  limitation. 

2.  When  a  partnership  is  dissolved  by  the  operation  of  law. 

3.  When  dissolution  occurs  by  the  death  of  one  of- the  partners. 

4.  When  a  dormant,  or  silent,  partner  retires. 

Manner  of  giving  Notice.  A  notice  of  dissolution  should  be  published 
in  one  of  the  usual  advertising  newspapers  of  the  city  in  which  the  busi- 
ness has  been  conducted.  This  notice  is  deemed  sufficient  for  all  those 
who  have  not  had  previous  dealings  with  the  firm. 

A  special  notice  of  the  dissolution  should  be  sent  to  those  who  have 
had  previous  dealings  with  the  firm.    (See  Form  II,  Appendix  F.) 

Prepare  a  notice  of  your  withdrawal  from  the  firm.  (See  Form  III, 
Appendix  F.)    Hand  in  the  notice. 

It  is  assumed  that  a  notice  of  dissolution  has  been  inserted  in  one  of 
your  usual  advertising  newspapers,  and  that  circulars  embodying  the 
facts  stated  in  the  notice  have  been  mailed  to  each  of  the  firms  with 
whom  you  have  had  dealings.  After  writing  the  circular,  the  work  of 
sending  it  to  the  various  firms  is  purely  mechanical,  and  it  is  thought 
best  not  to  require  the  student  to  do  all  this  work. 

After  notices  have  been  circulated  as  outlined  above,  your  liability, 
so  far  as  new  debts  are  concerned,  ceases. 


GENERAL  REVIEW  QUESTIONS 

1.  Under  what  circumstances  would  a  gain  or  loss  on  real  estate  be  likely  to 
occur  ?  2.  What  are  the  principal  advantages  of  the  invoice  book  ?  3.  Explain  the 
posting  of  (a)  the  separate  bills  in  the  invoice  book ;  (b)  the  weekly,  the  monthly,  or 
the  quarterly  totals  of  the  invoice  book,  4.  Explain  the  advantages  of  the  bill  book. 
How  is  it  proved  ?  5.  What  provision  was  made  in  the  cashbook  of  Set  V  for  mer- 
chandise discounts  ?  What  are  the  principal  advantages  of  these  special  columns  ? 
Explain  how  they  are  posted.  6.  Explain  the  meaning  of  3/5,  1/30,  net  60  da. 
7.  What  is  a  discount  memorandum  ?  8.  In  which  column  of  the  sales  book  should 
discounts  be  deducted  ?  Why  ?  9.  Define  and  differentiate  merchandise  discounts 
and  interest  and  discount.  10.  What  is  a  bill  of  lading?  How  is  it  usually 
drawn?  What  is  done  with  each  copy?  11.  Are  bills  of  lading  assignable  by 
indorsement?  12.  Should  transportation  companies  ever  deliver  goods  without 
receiving  the  bill  of  lading?  Why?  13.  Explain  the  meaning  of  the  following 
terms  :  (a)  C.O.D. ;  (b)  f.o.b. ;  (c)  shipper's  order.  14.  Describe  the  usual  method 
of  making  a  shipment  by  express  C.O.D.  15.  Outline  briefly  the  usual  process 
for  entering  C.O.D.  shipments  (a)  in  the  sales  book ;  (b)  in  the  ledger.     16.  What 


REVIEW  EXERCISES  197 

means  have  railway  and  steamship  companies  provided  for  shipping  goods  by 
freight  C.O.D.  ?  Explain  this  method  fully.  17.  Would  you  deposit  a  draft  at- 
tached to  a  bill  of  lading  for  shipper's  order  in  your  local  bank,  or  would  it  be 
more  desirable  to  forward  the  same  to  a  bank  located  in  the  place  to  which  goods 
have  been  consigned  ?  18.  Are  the  net  resources  of  a  firm  any  less  after  it  has  paid 
one  of  its  own  non-interest-bearing  notes?  Why?  19.  Are  the  net  resources  of  a 
firm  any  less  after  it  has  paid  one  of  its  own  interest-bearing  notes  ?     Why  ? 


EXERCISE  59 
A  Written  Review 

The  following  review  exercises  are  suggested : 

1.  Journalize  orally  or  in  writing  each  transaction  in  August. 

All  amounts  may  be  omitted,  as  the  value  of  the  exercise  is  in  determining  the 
debits  and  the  credits. 

2.  Make  the  following  opening  entries: 

a.  James  S.  Brien  and  Howard  A.  Ferris  began  business  with  the  fol- 
lowing resources  and  liabilities  ;  credit  each  proprietor  with  one  half  the 
net  resources : 

Deposit  in  Traders  National  Bank,  |4235.70 

Store  and  lot  valued  at  |6750 

Stock  of  merchandise  valued  at  1 12,534. 20 

Office  furniture  valued  at  $425 

Horse  and  wagon  valued  at  |275 

They  have  the  following  notes  outstanding : 

George  D.  Raney,  $1500 ;  interest  accrued  for  2  mo. 

Henry  D.  Fowler,  $725  ;  interest  accrued  for  1  mo. 
Accounts  receivable,  $2256.45 
Accounts  payable,  $1725.50 

For  estimated  early  payments  make  the  following  allowances:  on  accounts 
receivable,  2% ;  on  accounts  payable,  2%. 

Note.  Debit  accounts  receivable  for  the  face  value,  and  credit  Mdse.  Disc,  for  the  2% 
allowance.  Credit  accounts  payable  for  the  face  value,  and  debit  Mdse.  Disc,  for  the  2% 
allowance. 

5.  John  S.  Brady  &  Son  began  business  with  the  following  resources 
and  liabilities ;  credit  the  firm  with  the  net  resources : 

Stocks  and  bonds  on  hand,  $4200 

Interest  accrued  on  above,  $156.20 

Stock  of  merchandise  valued  at  $11,645.50 

Unpaid  freight  bill  on  merchandise,  $76.25    (Liability) 

Real  estate  valued  at  $5500 


198 


BOOKKEEPING 


They  hold  notes  against  the  following : 

Murray  &  Co.,  |450 ;  interest  accrued  for  3  mo. 

James  E.  Marston,  |320 ;  discount  allowed  for  2  mo. 

J.  H.  Belden,  $250 
They  have  the  following  notes  outstanding : 

Thomas  D.  Fales,  $350 ;  interest  accrued  for  2  mo. 

Derby  &  Son,  |300 ;  discount  allowed  for  1  mo. 
Office  fixtures  valued  at  $325 
Horses  and  wagons  valued  at  $500 
Accounts  receivable,  $2450 ;  estimated  discount,  1  % 
Accounts  payable,  $1800;  estimated  discount,  2% 

3.  The  formation  of  partnerships. 

The  following  illustrations  apply  to  the  formation  of  partnerships : 
Firsts  the  formation  of  a  partnership  on  the  basis  of  equal  investment 
by  each  partner  at  the  beginning  of  the  business. 

The  necessary  entry  is  of  the  simplest  character,  as  follows : 

Cash  $4000 

A  $2000 

B  2000. 

When  posted,  each  partner's  account  will  appear  as  follows : 

A 


19— 

Jan. 


2000 


19— 

Jan. 


2000 


Second^  the  formation  of  a  partnership  by  the  individual  proprietor 
when  he  sells  a  half  interest  in  an  established  business. 

Illustration :  A  has  an  established  business  worth  $15,000 ;  he  sells 
B  a  half  interest  for  $7500 ;  thus  B  becomes  an  equal  partner.  The 
money  received  by  A  is  not  a  part  of  the  capital  of  the  new  firm ;  it  is 
his  individual  possession,  and  the  capital  of  the  firm  is  $15,000. 

On  A's  books,  as  proprietor,  the  capital  account  appeared  as  follows : 


19— 
Jan. 


15000 


REVIEW  EXERCISES 


199 


Under  the  partnership  agreement  one  haK  of  this  sum  must  be  credited 
to  each  partner,  and  this  is  accomplished  bj  the  following  journal  entry : 
A  $7500 

B  17500 

When  this  entry  is  posted,  the  accounts  of  the  proprietors,  on  the  books 
formerly  used  by  A,  will  appear  as  follows : 

A      ' 


19— 

Jan. 


1 


7500 


19— 

Jan. 


15000 


19— 

Jan. 


7500 


Thirds  the  formation  of  a  partnership  when  the  incoming  partner  makes 
an  investment  equal  to  the  value  of  the  established  business. 

Illustration:  A  has  a  business  worth  |18,000 ;  B  invests  a  like  sum 
and  becomes  an  equal  partner.  The  money  invested  by  B  is  a  part  of 
the  capital  of  the  firm,  which  is  now  |36,000. 

On  A's  books,  as  proprietor,  the  capital  account  appeared  as  follows : 

A 


19— 

Jan. 


18000 


The  following  entry  should  be  made  when  B  makes  his  investment : 
Cash  118,000 

B  118,000 

After  posting  this  entry  in  the  books  formerly  used  by  A,  B's  account 
will  appear  as  follows : 

B 


19— 

Jan. 


18000 


A's  account  will  remain  unchanged,  and  each  partner  is  now  credited 
for  one  half  of  the  capital  of  the  firm. 

Note.  The  cash  items  in  the  illustrations  may  be  entered  in  the  cashbook ;  the  journal 
entry  has  been  used  simply  to  set  forth  the  debit  and  the  credit  items  more  clearly. 

Only  two  partners  have  been  considered,  but  the  principles  are  the  same  whether  there 
are  two  partners  or  more  than  two,  and  whether  the  investments  are  equal  or  unequal. 


200  BOOKKEEPING 

Make  entries  for  the  following  partnership  arrangements : 

a.  Henry  T.  Jackson  and  James  Young  form  a  partnership,  as  follows : 
Henry  T.  Jackson  invests  cash,  $1500,  and  a  stock  of  merchandise 

valued  at  |2750. 
James  Young  invests  cash,  $1250,  and  a  store  and  lot  worth  $3000. 
h.  Student  and  Fred  S.  Carmen  form  a  partnership,  as  follows  : 

Student  invests  cash,  $2000,  and  R.  S.  Good's  note  which  he  holds  ;  face 

of  the  note,  $500,  with  accrued  interest  for  4  mo. 
Fred  S.  Carmen  invests  cash  equal  to  the  total  investment  of  Student. 

c.  Harold  D.  Powers  owns  a  dry-goods  business  the  present  value  of  which 

is  $16,450.  He  sells  a  half  interest  to  Bernard  F.  Shaw  for  $8225. 

d.  George  D.  Fuller  owns  a  drug  store,  and  he  values  the  store,  fixtures, 

and  stock  at  $12,600.  Ealph  F.  Varley  becomes  an  equal  partner  with 
Fuller  by  investing  cash,  $7600,  and  a  stock  of  drugs  worth  $5000. 

e.  Henry  S.  Carey,  George  R.  Downey,  and  Harry  S.  Mason  form  a  part- 

nership on  the  following  conditions :  the  capital  is  to  be  $25,000,  of 
which  Carey  invests  $12,500,  Downey  $7500,  and  Mason  borrows 
$5000  of  Carey  and  invests  it  in  the  business. 

Note.    How  much  of  the  Mason  investment  and  loan  should  be  entered  on  the  books 
of  the  business  ? 


SET  VI.   WHOLESALE  GROCERY  BUSINESS 

The  Object  of  this  set  is  to  illustrate  in  a  brief  way  a  system  of 
bookkeepmg  adapted  to  a  general  wholesale  business. 

Special  Features.    Among  the  special  features  of  the  set  are : 

1.  Introduction  and  use  of  : 

a.  Auxiliary  ledgers. 

h.  Special-column  cashbook. 

c.  Special-column  journal. 

d.  Proprietors'  private  accounts. 

2.  Adjustment  of  interest  in  the  Proprietors'  accounts. 

3.  Suggestions  bearing  upon  business  correspondence. 

The  Books  used  are  the  cashbook,  the  sales  book,  the  invoice  book,  the 
journal,  the  general  ledger,  the  purchase  ledger,  the  sales  ledger,  the 
bill  book,  and  the  check  book. 

The  bill  book  and  the  check  book  are  the  same  as  in  the  preceding  sets. 


Form  for  making  Closing  Entry  in 

Sales  Book 

20  pkg.  S.  Yeast  Cakes 

1.05 

21 

500  lb.  P.  Tapioca 

.  ^ 

20 

25  bbl.  R.  P.  Flour 

4.75 

118 

75 

40  doz.  bottles  M.  Pickles 
16 

2.25 

90 

672 

98 

24 

J.  M.  Martin  &  Co. ,  Albany 
2/10,  net  30  da. 
25  bx.  W.  L.  Soap 

2.00 

60 

5  bbl.  C.  R.  Oatmeal 

6.60 

27 

50 

5  bbl.  S.  P.  Flour 

4.26 

21 

25 

150  gal.  P.  R.  Molasses 

300 

45 

14 

150  gal.  N.  0.  Molasses 

Total  sales  for  month 
Accounts  Receivable 

40^ 

60 

203 

76 

6762 

95 

6762 

"95 

16 

Mdse. 

6762 

95 

Sales  Book.  This  book  is  treated  in  the  same  way  as  the  one  illustrated 
on  page  64,  except  the  posting.  The  amounts  of  the  various  sales  are 
posted  separately  to  the  debit  of  the  personal  accounts  in  the  sales  ledger. 

201 


202 


BOOKKEEPING 


Price  List  for  September  and  October 


ARTICLE 

DESCRIPTION 

HOW  PUT  UP  FOR  SALE 

COST 

SELLING  PRICE 

Baking  Powder 

Royal 

Cases  of  1  doz.  1-lb.  cans 

$3.60  case 

$4.80 

4.50 

(<                         n 

Cleveland's 

<(            ((            << 

3.50  case 

Beans 

Lima 

Bulk 

3.25  bu. 

3.50 

'< 

New  York  Medium 

" 

2.50  bu. 

2.75 

Butter  Color 

Boxes 

1.50  box 

2.00 

Cocoa 

Baker's 

1-lb.  cans 

.48  lb. 

.60 

" 

Huyler's 

i-lb.  and  1-lb.  cans 

.43  lb. 

.58 

Coffee 

Plain  Rio 

125  lb.  to  bag 

.24  lb. 

.28 

" 

Genuine  Mocha 

150  lb.  to  bale 

.20  lb. 

.24 

" 

Fancy  Java 

75  lb.  to  mat 

.23  lb. 

.30 

Chocolate 

Hasty  Lunch 

24  1-lb.  tins  in  box 

.29  lb. 

.35 

(< 

Baker's 

12  1-lb.  tins  in  box 

.27  lb. 

.34 

Crackers 

Oyster 

60  lb.  to  bbl. 

.08  lb. 

.10 

<( 

Cream  Soda 

<(            (( 

.06  lb. 

.08 

Candy 

Stick 

Pails 

.12  lb. 

.14 

« 

Standard  Mixed 
Empire  Chocolate 

.10  lb. 

.12 

Drops 

5-lb.  boxes 

.07  lb. 

.10 

(( 

Peppermint  Creams 

30-lb.  pails 

.04  lb. 

.06 

(< 

Mixed  Creams 

Pails 

1.40  pail 

2.10 

Diamond  Salad 

Dressing 
Evaporated  Fruits 

Cases  of  doz.  bottles 

.90  case 

1.20 

Apricots 

25-lb.  boxes 

.08  lb. 

.10 

<(                    (( 

Apples 

50-lb.  boxes 

.m  lb. 

.06 

<<                    (( 

Raspberries 

Bulk 

.17  lb. 

.22 

Fish 

Cream  Codfish 

40-lb.  boxes 

.07i  lb. 

.09 

<( 

No.  1  Mackerel 

20-lb.  pails 

1.80  pail 

2.40 

Flour 

Roller  Process 

Barrels 

3.50  bbl. 

4.75 

" 

Searchlight  Pastry 

" 

3.35  bbl. 

4.50 

<< 

Puritan  Pancake 

Cases  of  20  5-lb.  sacks 

.12  sack 

.15 

<( 

Chef  Pastry 

<<            <<             (( 

.15  sack 

.18 

Horse-radish 

Cases  of  1  doz.  bottles 

.65  case 

.90 

Insect  Powder 

Boxes 

.16  box 

.24 

Mucilage 

Boxes  of  3  doz.  bottles 

.90  box 

1.20 

Matches 

Gates 

3-gro.  pkg. 

.90  pkg. 

1.20 

(< 

Parlor 

1-gro.  boxes 

1.15  box 

1.53 

Molasses 

Porto  Rico 

Bbls.  of  50  gal. 

.25  gal. 

.30 

(( 

New  Orleans 

<<              a 

.30  gal. 

.36 

Mixed  Pickles 

Doz.  bottles 

1.70  doz. 

2.20 

Oatmeal 

Cedar  Rapids 

Barrels 

4.50  bbl. 

6.00 

" 

H.  O. 

24  2-lb.  pkg.  in  box 

2.35  box 

3.10 

Olives 

Pint  cans 

2.20  doz. 

2.75 

Raisins 

London  Layer 

20-lb.  boxes 

.07  lb. 

.10 

<( 

California 

50-lb.  boxes 

.07  lb. 

.09^ 

Sugar 

Standard  A 

325-lb.  bbl. 

.04  lb. 

.05 

<? 

Fine  Granulated 

<(         <( 

.05  lb. 

.06 

K 

White  C 

330-lb.  bbl. 

.03  lb. 

'.o4 

(( 

Brown  C 

300-lb.  bbl. 

.02^  lb. 

Soap                   ' 

Sunlight 

Boxes  of  100  bars 

3.00  box 

4.00 

n"^ 

Wool 

Boxes  of  100  cakes 

3.00  box 

4.00 

tt 

Water  Lily 

Boxes 

1.70  box 

2.20 

Salt 

Ice  Cream 

200-lb.  bags 

.57  bag 
1.50  bbl. 

.75 

" 

Lehigh  Lump 

280-lb.  bbl. 

1.75 

Starch 

Golden  Grain 

160-lb.  bbl. 

.03  lb. 

.04 

«< 

Hoyt's  Wheat 

((         (( 

.05  lb. 

:o3| 

« 

Laundry 

<(         <( 

.02*  lb. 

Tea 

Choice  Japan 
Medium  Young 

75  lb.  to  half  chest 

.26  "^Ib. 

!35 

Hyson 

70  lb.  to  half  chest 

.21  lb. 

.28 

<< 

Finest  Oolong 

60  lb.  to  half  chest 

.35  lb. 

.51 

Tapioca 

Pearl 

Bulk 

.03  lb. 

.041 

«< 

Flake 

(< 

.031  lb. 

.041 

(( 

Rio 

<( 

.06  lb. 

.09 

Yeast  Cakes 

National 

Pkg.  of  1  doz.  cakes 

•37i  pkg. 

.50 

((         << 

Sunlight 

Pkg.  of  3  doz.  cakes 

.75  pkg. 

1.00 

SET  VI.   WHOL'ESALE  GROCERY  203 

When  the  sales  book  is  closed,  the  total  sales  are  posted  regularly  to 
the  debit  of  Accounts  Receivable  and  to  the  credit  of  Merchandise  in  the 
general  ledger. 

The  sales  book  of  some  large  concerns  is  provided  with  an  extra  column  for  cash 
sales ;  the  different  amounts  in  this  column  are  not  posted  to  the  sales  ledger,  but 
the  total  is  entered  in  the  cashbook  daily,  and  credited  to  the  Merchandise  account 
at  regular  intervals.  The  general  practice,  however,  is  to  treat  all  cash  sales  to 
regular  customers*  in  just  the  same  way  as  sales  on  account,  that  is,  the  goods  are 
charged  to  the  customer  from  the  sales  book  and  his  account  is  credited  through 
the  cashbook  for  the  amount  received.  The  latter  practice  is  followed  throughout 
the  intermediate  portion  of  this  text.  The  chief  arguments  in  favor  of  this  plan  are 
as  follows : 

1.  In  most  wholesale  houses  cash  is  understood  generally  to  mean  payments 
that  are  made  within  five  or  ten  days  from  the  date  of  the  bill. 

2.  Wholesale  houses  would  not  be  justified  in  quoting  the  same  terms  to  all 
customers ;  those  who  buy  in  large  quantities  can  be  given  better  terms  than  those 
who  buy  in  small  quantities.  As  a  basis  for  determining  the  best  possible  terms, 
a  customer's  ledger  account  should  be  consulted.  This  account  is  incomplete,  not 
furnishing  full  information,  if  the  cash  sales  are  not  entered  in  the  customer's 
account  in  the  ledger. 

3.  In  some  instances  a  customer,  for  good  business  reasons,  might  call  for  a 
statement  of  all  his  transactions  for  a  year,  and  it  would  be  to  any  dealer's  advan- 
tage to  be  able  to  furnish  such  a  statement  readily. 

Cashbook.  The  cashbook  used  in  this  set  is  designed  to  illustrate 
the  desirability  of  using  special  columns  to  meet  the  requirements  of 
certain  lines  of  business.  The  model  cashbook  on  pages  204  and  205 
is  self-explanatory. 

Note.  Additional  columns  may  be  placed  in  the  cashbook,  when  special  columns  are 
used,  if  their  introduction  will  lessen  the  work  and  increase  the  value  of  the  cashbook 
records. 

The  first  two  columns  on  the  left  are  reserved  for  receipts  from 
customers  on  account.  These  columns  are  similar  to  those  illustrated  in 
Set  V,  but  in  this  set  they  are  used  for  personal  items  only.  The  sepa- 
rate items  in  these  columns  are  credited  to  the  customers  in  the  sales 
ledger.  At  the  end  of  the  month,  or  as  often  as  may  be  found  desirable, 
the  total  of  the  first  column  is  posted  to  the  debit  of  Merchandise  Dis- 
counts and  to  the  credit  of  Accounts  Receivable  in  the  general  ledger. 
(See  page  204.) 

The  total  of  the  net  proceeds  column  is  posted  to  the  credit  of  Accounts 
Receivable  in  the  general  ledger. 

All  receipts  of  cash,  aside  from  the  items  from  personal  accounts,  are 
entered  in  the  G-eneral  column  on  the  left  side  of  the  cashbook,  and  these 
items  are  posted  separately. 


204 


BOOKKEEPING 


Cash  Receipts,  September,  19- 


DATE 


Sept. 


ACCOUNT  TO  BE  CREDITED 


Balance 
R.  11.  Traver 
Bills  Bee. 
W.  A.  Harman 
F.  E.  Gardiner  &  Co, 
Tenny  Bros,  &  Co. 
Bills  Bee. 
Interest 
Bills  Bee. 
Interest 
W.  M.  Fair 
Sam'l  W.  Hershey 
■Williams,  Harding  &  Co. 
F,  E.  Bogers    - 
W.  W.  Baker  &  Co, 
Mdse.  Disc,  Dr, 
To  Accts.  Bee. 
Accts.  Bee. 


EXPLANATION 


In  bank 
Investment 
Note  of  W.  E.  Frey 
Inv.  8/6,  less  2% 
Inv.  8/30,  less  3% 
Inv.  8/30,  less  3% 
Note  of  B,  O.  Cook 
Int.  on  above  note 
Note  of  J.  H.  Bair 
Int.  on  above  note 
Inv.  9/3,  less  3% 
Inv,  9/4,  less  2% 
Inv.  7/15 
Inv,  7/30 
Inv.  9/16,  less  3% 
Total  discounts  allowed 

on  sales  for  montb 
Beets,  on  aeeount  for  month 


ACCOUNTS  RECEIVABLE 


DISC. 
DR. 


70 


AMOUNT 
RECEIVED 


490 
1251 
1513 


356 
392 
1455 


13500 
5500 
1200 


900 

9 

1200 


29271  20 


SET  VI.    WHOLESALE  GROCERY 


205 


Cash  Payments,  September,  19 — 


ACCOUNTS  PAYABLE 

z 

z 

DATE 

DISC. 
CR. 

AMOUNT 
PAID 

2 

i= 

Sept. 

1 

1 

1 

2 

2 

4 

5 

5 

6 

9 

9 

11 

11 

12 

13 

15 

16 

17 

18 

19 

19 

22 

23 

23 

24 

25 

26 

26 

28 

28 

29 

30 

30 

30 

V' 

37 

39 
16 
5 

47 
54 

V 
V 
9 
>/ 

V 
42 
40 
16 
5 

10 
10 

V 
V 

1 
1 

42 

V 
16 
11 
8 

Expense 
Expense 
Expense 

Jordan,  Marsh  &  Co. 
Coll.  and  Exch. 
N.  P.  Pond  &  Co. 
Bills  Pay. 
Interest 
Coll.  and  Exch. 
A.  B.  Curtice  &  Co. 
C.  0.  Bond  &  Co. 
Expense 
Expense 
Mdse. 

Coll.  and  Exch. 
Expense 
Expense 

R.  H.  White  &  Co. 
Sibley,  Lindsay  &  Curr 
Bills  Pay. 
Interest 
Coll.  and  Exch. 
Office  Fixtures 
Office  Fixtures 
Expense 
Expense 
R.  R.  Traver 
Jas.  R.  Bender 
R.  H.  White  &  Co. 
Coll.  and  Exch. 
Coll.  and  Exch. 
Bills  Pay. 
Accts.  Pay. 
To  Mdse.  Disc. 

Rent  for  Sept. 
Insurance  premium 
Bill  for  stationery,  etc. 
Inv.  8/16,  less  2% 
On  foreign  checks 
Inv.  8/31,  less  3% 
Note  favor  E.  S.  Lee 
Int.  on  above  note 
On  foreign  checks 
Inv. 7/10 
Inv.  7/16 
Stamps 

Office  stationery 
Freight  Aug.  1  to  Sept.  1 
On  foreign  checks 
Telegram 

Traveling  salesman 
Inv.  8/12,  less  2% 
Inv.  8/18,  less  2% 
Note  favor  A.  Swan 
Int.  on  above  note 
On  foreign  checks 
Safe  for  office 
Letter  press 
Coal  bill  to  date 
Salaries  to  date 
Private  account 
Private  account 
Inv.  8/31,  less  2% 
On  above  N.Y.  draft 
On  Brown's  check 
Note  favor  J.  Green 
Total   discounts  on  pur- 
chases for  month 

42 
30 

34 

18 

8 
i,72 

970 

395 
1193 

1G66 
882 

392 

62 
G4 

150 
120 

27 

5 
16 

125 

13 
220 

50 

42 
98 

75 
50 

2 
3 

1 

15 

65 
75 

25 
40 

1000 
10 

169 

1500 
7 

250 
9 

100 
100 

400 

50 

50 
50 

30 
30 

11 

14 

Accts.  Pay. 
Expense 

Pay'ts  on  acct.  for  month 
Total  for  month 

7557 

2G 

679 

15 

7557 
679 

26 

15 

30 

18 

Coll.  and  Exch. 

Total  for  month 

T 

'20 

8 

20 

30 

Balance 

In  bank 

17480 

09 

= 

29271 

"20 

206 


BOOKKEEPIKG 


The  first  two  columns  on  the  right  are  reserved  for  payments  to  the 
creditors  on  account.  These  columns  are  for  personal  items  only,  and 
are  similar  in  use  to  the  columns  for  accounts  receivable  on  the  left  side, 
except  that  they  are  posted  to  the  debit  of  the  separate  accounts  with 
the  creditors  in  the  purchase  ledger.  At  the  end  of  the  month,  or  at 
other  regular  intervals,  the  total  of  the  first  column  is  posted  to  the 
debit  of  Accounts  Payable  and  to  the  credit  of  Merchandise  Discounts  in 
the  general  ledger.    (See  page  205.) 

The  total  of  the  net  proceeds  column  is  posted  to  the  debit  of  Accounts 
Payable  in  the  general  ledger. 

All  items  of  expense  are  entered  in  the  Expense  column,  and  only  the 
total  of  this  column  is  posted. 

All  items  of  collection  and  exchange  are  entered  in  the  Collection  and 
Exchange  column,  and  only  the  total  of  this  column  is  posted. 

All  the  other  cash  payments  are  entered  in  the  General  column,  and 
these  items  are  posted  separately. 


Form  for  making  Closing  Entry  in  Invoice  Book 


ll 


3^ 


rM. 


^^^^^^y?^. 


'Vrenton,  ^J,       jZ^^^,^/.       19- 


^frr.-'?^^^. 


-^>^^.,^. 


'^^^^ 


Sought  ofC.  W.  Allen  &  Co. 


'Germs  •  ^/^..  ^-9^^-^,  9/7.<r/^^ 


tJ^Cew  Yorh. 


^. 


-^-.<U^,^. 


^iu^.^^  /. 


^ 19=. 


'::^,^.^7o^.^^-i^v^..^^.^  r-^,^^:^ 


^^ 


'^^^^^ 


^^ 


^o  Qray,  Salisbury  &  Co.,  T>r, 

'Germs :  /-f^  .■■■7^^,^-J  t!>..^ti^^  _. 


MJ.      r.r^^J  -^-^9^..^^^^^^ 


^^^ 


.^^ 


/C^^y'-d^-:^^^ 


^97 


A^ 


'/J-^Z 


/^fZO 


I^ZJ 


4^j-6z 


^s6i 


S4^ 


^r 


SET  VI.   WHOLESALE  GROCERY  207 

Invoice  Book.  This  book  is  illustrated  and  explained  on  pages  142  and 
143.  The  separate  bills  are  credited  to  the  various  accounts  in  the  pur- 
chase ledger,  and  the  total  is  posted  to  the  debit  of  Merchandise  and  to 
the  credit  of  Accounts  Payable  in  the  general  ledger. 

Purchase  Ledger.  The  purchase  ledger  contains  a  record  of  trans- 
actions with  the  creditors.  The  principal  items  of  credit  in  this  ledger 
are  posted  from  the  invoice  book,  and  the  main  items  of  charge,  from  the 
cashbook;  but  both  debits  and  credits  for  the  creditors'  accounts  may 
come  from  the  journal. 

Sales  Ledger.  The  sales  ledger  contains  a  record  of  transactions 
with  customers.  The  mam  items  of  charge  come  from  the  sales  book, 
and  the  main  items  of  credit  from  the  cashbook ;  but  both  debits  and 
credits  for  the  customers'  accounts  may  come  from  the  journal. 

General  Ledger.  The  general  ledger  contains  a  record  of  all  accounts 
of  the  business  not  entered  in  the  purchase  ledger  or  the  sales  ledger. 
The  Accounts  Payable  account,  or  Purchase  Ledger  Account,  in  this  ledger 
represents  the  purchase  ledger,  and  the  balance  of  the  account  should 
agree  with  the  sum  of  the  balances  in  the  purchase  ledger.  The  Accounts 
Receivable  account,  ^r  the  Sales  Ledger  Account,  in  the  general  ledger 
represents  the  sales  ledger,  and  the  balance  of  the  account  should  equal 
the  sum  of  the  balances  in  the  sales  ledger. 

Advantages  of  Auxiliary  Ledgers.  The  chief  advantages  resulting 
from  the  use  of  auxiliary  ledgers  may  be  stated  as  follows : 

1.  By  glancing  at  the  balance  of  the  Accounts  Receivable  in  the  general  ledger  a 
merchant  may  know  at  once  the  aggregate  of  the  amounts  due  him.  This  would 
not  be  possible  if  a  sales  ledger  were  not  used. 

2.  By  glancing  at  the  balance  of  the  Accounts  Payable  a  merchant  may  know  the 
aggregate  of  the  amounts  he  owes.  This  account  would  not  be  in  the  books,  except 
in  scattered  details,  if  a  purchase  ledger  were  not  used. 

3.  The  Accounts  Receivable  and  the  Accounts  Payable  accounts  aid  in  proving  the 
correctness  of  the  personal  accounts  of  a  business. 

4.  Auxiliary  ledgers  show  a  classification  of  accounts  which  is  necessary  in  the 
bookkeeping  of  large  concerns ;  they  also  give  a  business  man  classified  information 
concerning  many  important  details  of  his  business. 

The  Journal  used  in  this  set  is  provided  with  special  columns.  (See 
model  journal,  page  208.) 

This  book  is  sometimes  provided  with  a  large  number  of  columns  to 
meet  the  requirements  of  some  lines  of  business.  The  columns  used 
here,  however,  are  sufficient  to  give  the  student  an  idea  of  how  special 
columns  may  be  used  to  advantage  in  the  journal. 

The  Purchase  Ledger  Debits  column  may  be  used  to  advantage  in 
houses  where  a  separate  ledger  is  kept  for  accounts  with  those  from 


208 


BOOKKEEPING 


whom  goods  are  bought.  Any  charges  to  these  accounts  in  the  journal 
should  be  extended  into  this  column.  The  several  amounts  are  posted 
separately  to  the  debit  side  of  the  accounts  in  the  purchase  ledger,  and 
the  total  is  carried  regularly  to  the  debit  of  Accounts  Payable  in  the 
general  ledger. 

BosTox,  Mass.,  September  25,  19 — 


ACCOUNT  AND  EXPLANATION 


M.  O.  Barry,  R.  O.  Cook,  and  D.  W.  Baker  have 
entered  into  a  copartnership  agreement  as  per  con- 
ditions in  the  articles  executed  Sept,  15. 

The  above  parties  have  this  day  bought  the  entire 
resources  and  are  to  assume  the  entire  liabilities  of 
the  late  firm  of  A.  J.  Weaver  &  Co.  as  per  contract  on 
file.  These  resources  and  liabilities  are  as  shown  in 
the  following  entry  made  to  open  a  new  set  of  books. 

Mdse.  Per  inventory 

Bills  Rec.  Per  bill  book 

OflBce  Fixtures         Per  inventory 

Good  Will  Established  trade 

Accts.  Rec.  Per  the  following  list 

Morgan  &  Co.,  Troy  1250 

Osborn,  Frey  &  Co.,  Westfield  750 

L.  O.  Sweetland,  Lynn  1900 

Insurance  Unexpired  premium 

Bills  Pay.        Per  bill  book 
Accts.  Pay.     Per  the  following  list 
Smith,  Perkins  &  Co. ,  N. Y.  1700.50 

Sprague&  Co.,  Boston  1900.50 

Harmon  &  Brown,  Chicago  3200. 

Bills  Pay.         Two  notes  given  A.  J.  Weaver  &  Co. 
Cash  Check  given  A.  J.  Weaver  &  Co. 


C.  O.  Bond  &  Co. 
Bills  Pay. 


Accepted  their  10-day  draft 


27 


Williams  &  Co. 
S.  W.  Brown 

Forward 


Drew  a  sight  draft  on  S.  W.  B.  and 
remitted  it  to  W.  &  Co.  on  acct. 


PURCHASE 
LEDGER 
DEBITS 


300 


1801 


GENERAL 
LEDGER 
DEBITS 


12000 
13000 
1200 
3000 
3900 


125 


94 


75 


SALES 
LEDGER 
CREDITS 


300 


GENERAL 
LEDGER 
CREDITS 


1900 
6801 


15000 
9525 


1500 


34727 


66 


75 


50 


BosTOx,  Mass.,  September  30,  19 — 


8 
18 

5 
6 

Forward 

Bills  Rec.                   Reed,  their  note  as  per 
Eaton  &  Co.        bill  book 

Accts.  Pay.  (Purchase  Ledger  Debits) 
General  Ledger  Debits 

Accts.  Rec.  (Sales  Ledger  Credits) 

General  Ledger  Credits 

1801 

35 

33226 
500 

75 

300 
500 

60 

34727 

50 

1801 

35 

33726 

75 

800 

60 

34727 

50 

1801 
33726 

35 
75 

800 
34727 

60 
50 

35528 

10 

= 

35528 

10 

SET  VL   WHOLESALE  GROCERY  209 

The  General  Ledger  Debits  column  contains  all  the  items  of  charge  in 
the  journal  except  the  purchase  ledger  debits.  The  total  is  not  posted. 

The  Sales  Ledger  Credits  column  may  be  used  to  advantage  in  most 
houses  where  a  separate  ledger  is  kept  for  accounts  with  those  to  whom 
goods  are  sold.  Any  credits  to  these  accounts  in  the  journal  should  be 
extended  into  this  column.  The  several  amounts  are  posted  separately  to 
the  credit  side  of  the  accounts  in  the  sales  ledger,  and  the  total  is  carried 
regularly  to  the  credit  of  Accounts  Receivable  in  the  general  ledger. 

The  General  Ledger  Credits  column  contains  all  the  items  of  credit  in 
the  journal  except  the  sales  ledger  credits.    The  total  is  not  posted. 

Incoming  Business  Forms  for  September 

A  tablet,  separate  from  the  text,  containing  all  the  incoming  business 
forms,  is  available  for  use  in  writing  this  set  when  business  practice  is 
used.  A  list  of  the  forms  is  given  herewith  so  that  the  text  affords  all 
material  requu-ed  for  writing  the  set  if  business  practice  is  omitted.  Also, 
these  forms  afford  an  opportunity  for  the  study  of  the  set  as  a  whole 
before  writing  the  same,  thus  meeting  a  requisite  for  adequate  drill 
work,  whether  the  business  forms  are  used  or  not. 

If  the  set  is  written  without  using  business  practice,  blank  invoice 
forms  may  be  used  for  the  invoice  book,  in  recording  the  merchandise 
bought ;  these  blanks  may  be  secured  of  the  publishers. 

If  business  practice  is  used  either  with  or  without  the  tablet,  the  student 
should  be  given  the  necessary  blank  forms  for  making  out  the  following : 

Form  1.  Check    drawn    by  Student   on    Traders  National    Bank,   City, 

Sept.  15,  in  favor  of  your  firm,  for  |7000. 
Form  2.  Note   of  Frey  &   Brown,  City,   dated  Sept.   1,  at  3  mo.,  for 

$8000.    Note  is  drawn  in  Studenfs  favor  and  is  transferred 

by  him  to  his  firm  by  full  indorsement. 
Form  3.  Check  of  Geo.  H.  Dobbin,  dated  Sept.  15,  drawn  on  Traders 

National  Bank,  City,  in  favor  of  your  firm,  for  |1 0,000. 
Form  4.  Check  of  Arthur  M.  Black,  dated  Sept.  15,  drawn  on  Traders 

National  Bank,  City,  in  favor  of  your  firm,  for  |14,000. 
Form  5.  Note  of  F.  Moore,  dated  Rome,  Sept.  1,  payable  at  The  Union 

Bank,  2  mo.  after  date.    Note  is  drawn  for  |1750,  in  favor 

of  A.  J.  Weaver  &  Co.,  and  is  transferred  to  your  firm  by 

full  indorsement. 
Form  6.  Note  of  Walter  L.  Parker,  dated  City,  Sept.  1,  payable  at  The 

Union  Bank,  30  da.  after  date.    Note  is  drawn  for  |700,  in 

favor  of  A.  J.  Weaver  &  Co.,  and  is  transferred  to  your  firm 

by  full  indorsement. 


210  BOOKKEEPIKG 

Form  7.  Note  of  Benton  Bros.  &  Co.,  dated  City,  Aug.  26,  payable  at 
The  Union  Bank,  60  da.  after  date.  Note  is  drawn  for  |300, 
in  favor  of  A.  J.  Weaver  &  Co.,  and  is  transferred  to  your 
firm  by  full  indorsement. 

Form  8.  Bill  of  Eureka  Coal  Co.  to  your  firm  for  5  T.  coal  at  |4.50. 
Terms :  cash.    Bill  is  "dated  City,  Sept.  18,  and  is  receipted. 

Form  9.  Bill  of  Geo.  E.  Roe  &  Co.,  for  1  one-horse  delivery  wagon,  $65  ; 
1  heavy  truck  wagon,  $90 ;  1  set  single  harness,  $35 ;  1  set 
double  harness,  $85.  Terms:  cash.  The  bill  is  dated  City, 
Sept.  19,  and  receipted. 

Form  10.  Bill  of  the  Daily  Transcript  Co.  for  advertising  to  date,  $49.23. 
Terms:  cash.  The  bill  is  dated  City,  Sept.  19,  and  receipted. 

Form  11.  Bill  of  R.  H.  Myers  &  Co.,  for  1  sales  ledger,  $1.50;  1  pur- 
chase ledger,  $1.50 ;  1  general  ledger,  $3 ;  1  journal,]  75(f ; 
1  cashbook,  $2.75;  1  bill  book,  75(f;  5  M  No.  6  envelopes 
and  printing,  $6.50 ;  5  M  sheets  letter  paper  and  printing, 
$9.60.  Terms :  cash,  less  1  % .  The  bill  is  dated  City,  Sept.  20, 
and  receipted. 

Form  12.  Bill  of  Eureka  Coal  Co.  to  Geo.  H.  Dobbin  for  3  T.  coal  at 
$4.50.  Terms:  cash.  The  bill  is  dated  Sept.  20,  and  receipted. 

Form  13.  Letter  of  application  to  your  firm  from  Albert  B.  Curtis, 
dated  City,  Sept.  19.  Applicant  saw  your  advertisement  in 
the  Evening  Transcript  for  a  shipping  clerk  and  wishes  to  be 
considered  an  applicant  for  the  position.  He  is  a  high-school 
graduate  and  has  had  experience  as  a  salesman  with  the  firm 
of  W.  H.  Glenny  &  Co.,  City.  He  refers  to  John  W.  Nellis, 
principal  of  the  high  school,  and  to  G.  B.  Watkins,  manager 
for  W.  H.  Glenny  &  Co. 

Inclose  the  letter  in  an  envelope,  properly  addressed. 

THINGS  TO  BE  OBSERVED  IN  LETTERS  OF  APPLICATION 

1.  The  use  of  proper  materials : 

a.  Good  ink. 

b.  Paper  of  the  proper  size  and  quality. 

c.  Envelopes  of  the  proper  size  and  quality. 

2.  Good  mechanical  and  grammatical  construction. 

3.  Brief  and  concise  expressions. 

4.  Good  tone : 

a.  Frank,  sincere  expressions. 

b.  Sufficient   self-confidence    and    self-respect.     (State   your   qualifications 
modestly,  but  frankly.) 

c.  Truthfulness. 


SET  VI.   WHOLESALE  GROCERY  211 

5.  Necessary  information  with  regard  to  yourself  : 

a.  Qualifications,  general  and  special. 

b.  References. 

c.  Salary  expected  (sometimes ;  instructor  should  explain). 

d.  Age  (sometimes ;  instructor  should  explain). 

6.  Courteous  introduction  and  closing. 

'     Form  14.  Draft  of  The  Union  Bank,  City,  dated  Sept.  21,  drawn  on 

Chemical  National  Bank,  New  York,  in  favor  of  your  firm, 

for  1841.47,  W.  B.  Frey,  Cashier. 
Form  15.  Sight  draft,  dated  City,  Sept.  21,  drawn  by  David  R.  Warriner, 

in  favor  of  himself,  on  Arthur  M.  Black,  for  $50. 
Form  16.  Draft  drawn  by  The  Union  Bank,  City,  Sept.  24,  on  Chemical 

National  Bank,  New  York,  in  favor  of  your  firm,  for  $1297.18, 

W.  B.  Frey,  Cashier. 
Form  17.  Draft  drawn  by  Traders  National  Bank,  Weedsport,  Sept.  23, 

on  Chemical  National  Bank,  New  York,  in  favor  of  F.  W. 

Earl  &  Co.,  for  $950,  C.  W.  Amsden,  Cashier.    The  draft  is 

transferred  to  your  firm  by  full  indorsement. 
Form  18.  Check  of  D.  L.  Hinman  &  Co.,  City,  on  Traders  National  Bank, 

dated  Sept.  24,  in  favor  of  your  firm,  for  $411.99. 
Form  19.  Invoice  of  Walter  Baker  &  Co.,  New  York,  dated  Sept.  22. 

Terms :  3/5,  net  30  da.    Items  as  follows : 

500  1-lb.  cans  B.  Cocoa  500  bx.,  6000  lb.,  B.  Chocolate 

5000  lb.  P.  Tapioca 

Form  20.  Draft  drawn  by  Traders  National  Bank,  Allston,  Sept.  24,  on 
Chemical  National  Bank,  New  York,  in  favor  of  Clinton, 
Jones  &  Co.,  for  $292.04,  W.  F.  Pratt,  Cashier.  The  draft 
is  transferred  to  your  firm  by  full  indorsement. 

Form  21.  Invoice  of  Smith,  Perkins  &  Co.,  New  York,  dated  Sept.  24. 
Terms  :  5/10,  net  30  da.    Items  as  follows : 

50  bags,  6250  lb.,  P.  R.  Coffee         100  half  chests,  7500  lb.,  C.  J.  Tea 

50  bales,  7500  lb.,  G.  M.  Coffee       100  half  chests,  6000  lb.,  F.  0.  Tea 

100  mats,  7500  lb.,  F.  J.  Coffee 

Form  22.  Note  of  Frank  Moore  &  Son,  City,  dated  Sept.  25,  drawn  in 

favor  of  your  firm,  for  $745.69,  payable  10  da.  from  date,  at 

The  Union  Bank. 
Form  23.  Check  of  Salisbury,  Gray  &  Co.,  Rochester,  dated  Sept.  24,  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  $260.51. 
Form  24.  Check  of  J.  D.  Manning,  Albany,  dated  Sept.  24,  on  Traders 

National  Bank,  in  favor  of  your  firm,  for  $600. 


212  BOOKKEEPING 

Form  25.  Bill  of  R.  O.  Merrill  &  Co.,  City,  dated  Sept.  25.  Terms:  cash. 
Items  as  follows : 

30  #16  Packing  Boxes  at  20^  35  #3  Packing  Boxes  at  10^ 

The  bill  is  receipted  by  O.  W. 

Form  26.  Invoice  of  Geo.  H.  Buell  &  Co.,  City,  dated  Sept.  26.  Terms : 
30-da.  note  in  10  da.,  with  interest  at  6%,  less  1%.  Items 
as  follows : 

240  bu.  N.Y.  Medium  Beans  200  lb.  E.  Raspberries 

25  bx.,  1250  lb.,  E.  Apples 

Form  27.  Invoice  of  J.  E.  Seel  &  Co.,  City,  dated  Sept.  26.  Terms :  2/10, 
net  30  da.    Items  as  follows : 

25  pails  M.  C.  Candy  500  lb.  S.  M.  Candy 

50  bbl.  L.  L.  Salt 

Form  28.  Check  of  T.  B.  Welch  &  Co.,  Medford,  dated  Sept.  25,  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  1 296.94. 
Form  29.  Draft  drawn  by  The  Union  Bank,  City,  dated  Sept.  25,  on 

Chemical  National  Bank,  New  York,  in  favor  of  your  firm, 

for  $1949.70,  W.  B.  Frey,  Cashier. 
Form  30.    C.O.I),   envelope.     Data  as   follows:    Cash   inclosed,   $18.60. 

Goods  were  shipped  by  your  firm  to  W.  D.  Greene,  Dans- 

ville,  Sept.  25. 

Note.  An  envelope  containing  the  required  amount  of  cash  will  be  found  in  the  back 
part  of  the  tablet  of  Incoming  Business  Forms.  If  business  practice  is  used  and  the  In- 
coming Business  Forms  are  not  used,  get  the  cash  of  the  instructor. 

Form  31.  Draft  drawn  by  Traders  National  Bank,  Troy,  on  Chemical 
National  Bank,  New  York,  in  favor  of  Williams,  Harmon 
&  Co.  for  $399.35,  R.  C.  Cook,  Cashier.  Draft  is  dated 
Sept.  25  and  is  transferred  to  your  firm  by  full  indorsement. 

Form  32.  Sight  draft  of  Salisbury,  Gray  &  Co.,  Rochester,  dated  Sept.  25, 
in  favor  of  your  firm,  on  J.  E.  Seel  &  Co.,  City,  for  $50. 

Form  33.  Invoice  of  Stickney,  Poor  &  Co.,  New  York,  dated  Sept.  26. 
Terms :  3/10,  net  60  da.    Items  as  follows : 

100  bx.,  2500  lb.,  E.  Apricots  250  bx.  Insect  Powder 

50  bx.  Butter  Color  50  bx.,  2500  lb.,  E.  Apples 

100  bx.  Mucilage  100  bbl.  R.  P.  Flour 

The  discount  is  deducted  and  the  bill  receipted. 

Form  34.  Check  of  W.  L.  Anderson,  Perth  Amboy,  dated  Sept.  26,  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  |400. 


SET  VI.   WHOLESALE  GROCERY  213 

Form  35.  Invoice  of  Gray,  Dunkle  &  Co.,  Chicago,  dated  Sept.  26. 
Terms;  3/10,  net  30  da.    Items  as  follows: 

26  bbl.,  7500  lb.,  Br.  C  Sugar  10  bbl.,  3300  lb.,  Wh.  C  Sugar 

200  half  chests,  14,000  lb.,  M.  Y.  H.  Tea 

Form  36.  Check  of  James  K.  Lusk,  City,  dated  Sept.  28,  on  Traders 
National  Bank,  in  favor  of  your  firm,  for  |369.07. 

Form  37.  Invoice  of  Bates,  Aldrich  &  Co.,  Boston,  dated  Sept.  27. 
Terms  :  3/5,  net  30  da.    Items  as  follows : 

100  1-lb.  cans  Huyler's  Cocoa  100  pails  M.  C.  Candy 

60  bbl.  S.  P.  Flour  20  bbl.,  6500  lb.,  St.  A  Sugar 

20  bbl.,  6500  lb.,  F.  G.  Sugar 

Form  38.  Invoice  of  D.  W.  Simpson  &  Co.,  Chicago,  dated  Sept.  27. 
Terms :  3/10,  net  30  da.    Items  as  follows : 

60  bx.  S.  Soap  125  bx.  W.  Soap 

60  cases,  1000  sacks,  C.  P.  Flour  50  bx.  W.  L.  Soap 

20  bbl.,  1200  lb.,  0.  Crackers  5  cases,  100  sacks,  P.  P.  Flour 

20  bbl.,  1200  lb.,  C.  S.  Crackers 

Form  39.  Draft  drawn  by  The  Union  Bank,  City,  dated  Sept.  28,  on 

Chemical  National  Bank,  New  York,  in  favor  of  your  firm, 

for  1907.43,  W.  B.  Frey,  Cashier. 
Form  40.  Check   of  W.  D.  Packard   &  Co.,  City,  dated   Sept.  28,  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  |605.38. 
Form  41.  Note  of  D.  L.  Hinman  &  Co.,  City,  dated  Sept.  29,  payable  at 

The  Union  Bank,  10  da.  from  date,  to  your  firm,  |500. 
Form  42.  Bill  of  Enterprise  Carting  Co.,  City,  dated  Sept.  29.    Terms: 

cash.    Items  as  follows : 

Sept.  24,  Freight,  $15.75 ;  Cartage,  $1.60 

27,  Freight,    49.25 ;  Cartage,    6.50 

28,  Cartage,      4.75 

The  bill  is  receipted  by  W.  M.  O. 

Memoranda  of  Transactions  for  September 

Saturday,  Sept.  15 

Since  selling  your  interest  in  the  furniture  business  of  the  late  firm  of 
Student  &  Co.  you  have  had  several  conferences  with  Geo.  H.  Dobbin 
and  Arthur  M.  Black,  relative  to  making  an  investment  in  a  wholesale 
grocery  business. 


214  BOOKKEEPING 

To-day  it  has  been  decided  to  enter  into  a  partnership  for  the  purpose 
of  conducting  a  wholesale  grocery  business  under  the  following  conditions : 

1.  The  name  of  the  copartnership  will  be  Student,,  Black  &  Co. 

2.  Investments  will  be  as  follows : 

a.  Arthur  M.  Black  makes  a  cash  investment  of  $14,000. 
h.  Geo.  H.  Dobbin  makes  a  cash  investment  of  |1 0,000. 
c.  Student  makes  a  cash  m vestment  of  f  7000,  and  a  note  of  Frey  & 
Brown  in  his  favor,  dated  Sept.  1,  at  3  mo.,  for  |8000. 

3.  The  partnership  shall  continue  for  two  years,  unless  the  parties 
mutually  consent  to  a  dissolution  at  an  earlier  date. 

4.  Gams  shall  be  shared  equally  and  losses  borne  equally. 

6.  Student  and  Black  shall  each  receive  $200  per  month  for  their 
services,  and  Dobbin,  $150. 

6.  Whenever  the  books  of  the  firm  are  closed,  each  partner  shall  be 
charged  with  interest  at  6%  on  all  sums  withdrawn  for  private  use,  and 
shall  receive  interest  at  the  same  rate  on  all  sums  invested. 

Draw  up  articles  of  copartnership,  fully  covering  the  above  points. 
(See  Form  V,  Appendix  F.) 

Fold  and  brief  the  articles  (see  page  181)  and  then  hand  them  in. 

Each  partner  pays  his  investment  as  per  agreement. 

Receive  the  three  checks.  Dobbin's  and  Black's  checks  are  Forms  3 
and  4.    Your  check  and  note  are  Forms  1  and  2. 

Enter  the  note  in  the  bill  book  and  place  it  in  the  proper  envelope.  Credit 
Student,  Black  &  Co.  for  the  total  investment  on  the  left  side  of  the  cashbook,  extend- 
ing the  amount  into  the  general  column.  Debit  Bills  Receivable  on  the  right  side 
of  the  cashbook  for  the  amount  of  the  note,  $8000,  extending  the  amount  into  the 
general  column.  The  difference  between  the  two  amounts  recorded  in  the  cashbook 
will  show  the  amount  of  cash  received  by  the  business,  $31,000. 

Open  an  account  with  The  Union  Bank  and  deposit  the  three  checks 
on  hand. 

When  signing  the  name  of  the  firm  to  indorsements,  notes,  checks,  etc., 
sign  Student,  Black  &  Co. 

Monday,  Sept.  17 

A.  J.  Weaver  &  Co.,  of  your  place,  have  offered  to  sell  you  the  entire 
resources  and  liabilities  of  their  business  located  at  420  State  St.,  on  the 
following  conditions  t 

1.  That  you  pay  them  $6000  for  the  good  will  of  their  business. 

2.  That  you  buy  all  their  resources  at  face  value,  the  personal  ac- 
counts and  the  quality  and  the  quantity  of  the  merchandise  on  hand  to 
be  covered  by  their  written  guarantee. 


SET  VI.   WHOLESALE  GROCERY  215 

3.  That  you  assume  their  lease  of  the  building  at  420  State  St.  and 
pay  all  their  liabilities. 

4.  That  you  pay  them  for  the  net  assets  of  the  business,  cash,  $14,000, 
and  the  balance  in  two  notes  payable  in  3  mo.  and  6  mo.  respectively, 
without  interest. 

GOOD  WILL  EXPLAINED 

The  term  good  loill  can  hardly  be  said  to  have  any  precise  signification.  It  is  gen- 
erally understood  to  stand  for  certain  advantages  obtained  by  the  purchaser  of  any 
business  in  consequence  of  his  position  before  the  public  as  succeeding  to  an  enter- 
prise which  has  been  identified  in  the  past  with  the  good  name  and  the  repute  of 
his  predecessor.  Its  value  is  dependent  upon  the  ability  of  the  purchaser  to  main- 
tain and  improve  past  celebrity,  reputation  for  skill,  punctuality,  etc. 

The  Good  Will  account  may  appear  as  a  resource  on  the  books  of  the  purchaser 
of  any  business,  but  its  value  is  never  definite. 

The  value  of  the  account  is  necessarily  indefinite  because  of  its  dependence  on 
the  maintenance  of  the  reputation  and  the  success  of  the  business,  and  as  these 
are  changing  factors,  the  value  of  it  is  subject  to  change. 

When  a  business  changes  ownership,  the  good  will  is  then  subject  to  a  definite 
valuation,  as  agreed  upon  by  the  buyer  and  the  seller. 

The  account  is  seldom  opened  except  in  connection  with  the  purchase  and  the  sale 
of  an  established  business.  When  a  business  of  recognized  reputation  is  offered  for 
sale,  the  good  will  is  frequently  as  much  a  matter  for  consideration  as  any  commodity. 
The  account,  however,  is  of  more  or  less  fictitious  value,  and  many  business  men 
prefer  to  drop  it  gradually  from  their  records  in  the  ledger.  This  may  be  done  by 
carrying  regularly  a  definite  portion  of  the  account  to  the  Loss  and  Gain  account, 
when  the  books  are  closed. 

In  the  course  of  time,  this  plan  of  carrying  a  certain  portion  of  the  Good  Will 
account  to  the  Loss  and  Gain  account  will  eliminate  it  from  the  open  ledger 
accounts  of  the  business. 

You  accept  the  proposition  of  A.  J.  Weaver  &  Co.  and  ask  them  to 
make  out  a  contract  of  sale  at  once. 


Tuesday,  Sept.  18 

A  contract  of  sale  covering  the  following  resources  and  liabilities  was 
received  by  Mr.  Black  from  A.  J.  Weaver  &  Co.  this  morning.  It  was 
duly  examined  by  Joseph  M.  Gordon,  Esq.,  the  attorney  for  your  firm, 
and  when  found  strong  and  binding  in  every  way  was  filed  among  other 
important  papers  in  the  firm's  safe. 

Note.  Form  IV,  Appendix  F,  is  a  contract  of  sale  similar  to  the  one  which  would  be 
given  by  A.  J.  Weaver  &  Co.  in  the  preceding  transaction. 

If  thought  best,  the  instructor  may  require  the  student  to  prepare  the  contract  for  the 
preceding  transaction. 


216 


BOOKKEEPING 


Resources 
Mdse.,  per  schedule  on  file  $14609.50 

Bills  Eeceivable,  per  the  following  list  2750. 

1.  Note  of  F.  Moore,  at  2  mo.  from  Sept.  1  $1750. 

2.  Note  of  Walter  L.   Parker,  at  30  da.  from 

Sept.  1  700. 

3.  Note  of  Benton  Bros.  &  Co.,  at  60  da.  from 

Aug.  26  300. 

Office  Fixtures,  per  schedule  on  file  1920. 

Rent,  due  from  tenants  for  subrentals  50. 

Insurance,  unused  premium  240. 

Good  Will,  estimated  value  6000. 

Accounts  Receivable,  per  the  following  list  16814.10 

Williams,  Harmon  &  Co.,  Troy  6252.60 

Fred  W.  Hill  &  Co.,  Rome  1642.40 

W.  L.  Anderson,  Perth  Amboy  1400. 

Frank  Moore  &  Son,  City  2145.69 

James  K.  Lusk,  City  592.50 

J.  D.  Manning,  Albany  1600. 

D.  L.  Hinman  &  Co.,  City  420.40 

F.  W.  Earl  «&  Co.,  Weedsport  1500. 

Salisbury,  Gray  &  Co.,  Rochester  1260.51 


Liabilities 

Bills  Payable,  per  the  following  list  $2300. 

1.  Note  at  30  da.  from  Aug.  26,  in  favor  of 

King  &  Co.,  payable  at  The  Union  Bank         $1500. 

2.  Note  at  30  da.  from  Sept.  3,  in  favor  of  Boyd, 

Evans  &  Co.,  payable  at  The  Union  Bank  800. 

Accounts  Payable,  per  the  following  list  18166. 

Walter  L.  Mann  &  Co.,  Boston  2150. 

D.  W.  Smith  &  Co.,  New  York  2100. 

Smith,  Perkins  &  Co.,  New  York  1450. 

Bates,  Aldrich  &  Co.,  Boston  1365.45 

D.  W.  Simpson  &  Co.,  Chicago  7100.55 

Gray,  Dunkle  &  Co.,  Chicago  4000. 

Note.  In  actual  business  the  two  bills  payable  would  be  in  the  possession  of  the 
payees  or  the  bank  at  which  they  are  made  payable.  In  this  case  it  is  assumed  that  they 
are  in  the  possession  of  the  bank  for  collection.  The  student  will  therefore  need  to  draw 
up  both  notes  and  hand  them  to  the  bank  or  to  the  instructor.  Indorse  them  as  they 
should  be  indorsed  by  the  payees  when  left  at  the  bank  for  collection. 

Write  the  check  and  the  notes  in  payment  of  the  purchase  from  A.  J. 
Weaver  &  Co.,  as  per  agreement. 

Make  the  journal  and  the  cashbook  entries  for  the  purchase.  Study  the  model 
journal,  page  208.    Check  the  cash  item  in  both  the  journal  and  the  cashbook. 


SET  VI.   WHOLESALE  GROCERY  217 

Take  the  notes  of  A.  J.  Weaver  &  Co.,  Forms  5,  6,  and  7,  and  enter 
them  in  the  bill  book.   Also  enter  the  bills  payable  in  the  bill  book. 

Post  the  journal  and  the  cashbook  entries  just  made  to  the  proper  ledgers.  If 
necessary,  consult  the  instructor. 

After  posting  the  journal  entries  to  the  general  ledger,  debit  the 
several  personal  accounts  receivable  in  the  sales  ledger  and  credit  the 
several  personal  accounts  payable  in  the  purchase  ledger. 

In  posting,  allow  one  third  of  a  page  for  each  account  in  the  general  ledger,  and 
one  fourth  of  a  page  for  each  account  in  the  sales  ledger  and  the  purchase  ledger. 

Prepare  an  index  for  each  ledger ;  the  general  ledger  on  the  first  page,  and  the 
others  on  the  second  page. 

In  the  sales  ledger  and  the  purchase  ledger  write  the  address  after  each  ledger 
title.    This  should  be  written  in  a  smaller  hand  just  to  the  right  of  the  title. 

Wednesday,  Sept.  19 

You  desire  to  engage  the  services  of  a  competent  shipping  clerk 
and  decide  to  insert  an  advertisement  in  the  Evening  Transcript  of 
your  place. 

Prepare  an  advertisement  stating  the  qualifications  you  consider  desirable  in  a 
candidate  for  such  a  position  as  you  have  to  fill. 

Write  checks  in  payment  of  the  following : 

Two  work  horses  purchased  of  Walter  H.  Wood  for  |125  each; 
bill  of  Eureka  Coal  Co.,  Form  8,  for  coal,  |22.50 ;  bill  of  Geo.  E. 
Roe  &  Co.,  Form  9,  for  wagons,  harnesses,  etc.,  $275 ;  bill  of  the  Daily 
Transcript  Co.,  Form  10,  for  advertising  to  date,  |49.23. 

Charge  the  advertising  and  the  coal  to  Expense,  and  the  other  items  to  Horse 
and  Wagon  account. 

Note.  Unless  otherwise  instructed,  hand  in  all  outgoing  papers.  When  in  doubt  as 
to  what  should  be  done  with  any  incoming  forms,  consult  the  instructor. 

Write  letters,  ordering  the  following : 

1.  Of  Walter  Baker  &  Co.,  New  York,  the  goods  outlined  in  Form 
19,  page  211.  Give  references  and  shipping  directions  and  ask  for  the 
best  cash  discounts. 

2.  Of  Smith,  Perkins  &  Co.,  New  York,  the  goods  outlined  in 
Form  21,  page  211.  These  people  have  had  extensive  dealings  with 
the  old  firm  of  A.  J.  Weaver  &  Co.,  but  you  are  entire  strangers  to 
them.  Give  such  information  concerning  your  firm  as  will  secure 
prompt  shipment  of  the  goods  you  order.  If  necessary,  consult  the 
instructor. 


218  BOOKKEEPING 

Thursday,  Sept.  20 

Pay  the  following  bills  by  checks:  bill  of  R.  H.  Myers  &  Co., 
Form  11,  for  office  books,  stationery,  etc.,  |26.09 ;  bill  of  Eureka 
Coal  Co.,  Form  12,  for  the  private  account  of  Geo.  H.  Dobbin,  $13.50. 
Open  an  account  with  Geo.  H.  Dobbin,  Private, 


WHY  PRIVATE  ACCOUNTS  WITH  THE  INDIVIDUAL  MEMBERS  OF  A 
FIRM  SHOULD  BE  OPENED 

Strictly  speaking,  these  accounts  do  not  represent  a  part  of  the  investment  of  any 
business,  but  rather  the  items  show  the  dealings  of  the  business  with  the  individual 
members  of  the  firm  ;  it  is,  therefore,  desirable  that  they  be  kept  separate  from  the 
account  or  accounts  representing  the  capital  of  the  concern. 

The  failure  to  keep  such  accounts  confuses  business  and  private  affairs,  fosters 
carelessness  and  extravagance,  and  sometimes  results  in  financial  disaster. 

The  capital  account  or  investment  is  a  fund  to  be  used  in  carrying  on  the  business, 
and  is  not  to  be  disturbed  except  by  agreement  of  the  partners  and  the  amendment 
of  the  articles  of  partnership. 


ITEMS  THAT  ARE  ENTERED  IN  PROPRIETORS'  PRIVATE  ACCOUNTS 

Debits 

1.  Cash,  or  any  other  property  belonging  to  the  firm,  withdrawn  by  a  partner 
for  private  use. 

2.  Private  debts  of  a  partner  paid  by  the  firm. 

3.  Proper  share  of  any  net  losses  to  be  borne  by  a  partner  when  the  books  are 
closed. 

Credits 

1.  Cash  advanced  to  the  business  by  a  partner  and  not  counted  as  a  part  of  the 
capital  of  the  firm. 

2.  Unpaid  salary  due  a  partner. 

3.  Firm  debts  assumed  by  a  partner. 

4.  Proper  share  of  any  net  gains  of  the  business. 

Friday,  Sept.  21 

In  response  to  your  advertisement  of  Sept.  19,  for  a  competent  ship- 
ping clerk,  twenty-three  letters  were  received ;  one  from  Albert  B. 
Curtis,  270  Tremont  St.,  impressed  you  favorably.  Form  13,  and  you 
have  had  an  interview  with  the  young  man,  which  has  resulted  in  his 
engagement  with  your  firm  at  |25  per  week.  His  appointment  dates 
from  Monday,  Sept.  24. 

File  the  letter,  as  it  may  be  needed  for  reference. 


SET  VL   WHOLESALE  GROCERY  219 

Engage  Edward  McDorman  as  driver  at  |10  per  week. 
Make  a  memorandum  and  place  it  on  file. 

Write  letters,  ordering  the  following  goods  : 

1.  Of  Stickney,  Poor  &  Co.,  New  York : 

250  bx.  Insect  Powder  2500  lb.  E.  Apples 

50  bx.  Butter  Color  2500  lb.  E.  Apricots 

100  bx.  Mucilage  100  bbl.  R.  P.  Flour 

Inclose  a  New  York  draft  in  payment  of  the  bill,  less  3%.  Buy  the 
draft  by  check.  Form  14  ;  exchange,  25(f. 

2.  Of  Gray,  Dunkle  &  Co.,  Chicago,  the  goods  outlined  in  Form  35, 
page  213.  Remember  that  this  firm  was  one  of  the  creditors  of  the  late 
house  of  A.  J.  Weaver  &  Co.,  and  word  the  letter  accordingly. 

3.  Of  Bates,  Aldrich  &  Co.,  Boston,  the  goods  outlined  in  Form  37, 
page  213.  The  members  of  this  firm  were  creditors  of  A.  J.  Weaver  &  Co. 

If  you  pay  the  balance  in  favor  of  D.  W.  Simpson  &  Co.  this  week, 
you  will  get  a  discount  of  5%. 

Write  your  check  for  the  amount  shown  in  the  purchase  ledger,  less 
5%.    Take  the  check  to  your  bank  or  instructor  and  have  it  certified. 

CIRCUMSTANCES  UNDER  WHICH  CHECKS  ARE  CERTIFIED  IN  BUSINESS 

Checks  pass  as  money  very  freely  from  one  person  to  another.  They  cannot 
always  be  accepted  as  money,  however,  for  there  is  nothing  to  prevent  any  person 
from  drawing  a  check  upon  a  bank  in  which  he  has  no  money  on  deposit.  Before 
a  business  man  accepts  a  check  from  a  stranger  he  may  require  that  it  be  certified ; 
that  is,  that  it  be  stamped  by  the  bank  upon  which  it  is  drawn,  in  a  manner  that 
will  indicate  its  validity. 

When  a  check  is  certified,  the  bank  immediately  charges  the  amount  to  the 
drawer  and  sets  aside  the  funds  from  which  to  pay  the  check  when  it  is  presented. 

A  certified  check  is  secured  by  the  bank  on  which  it  is  drawn,  and  it  is  good  as 
long  as  the  bank  is  solvent. 

SIGNIFICANCE  OF  CERTIFICATION 


i 


1.  By  certifying  a  check  a  bank  declares  in  effect  the  following : 

a.  That  the  signature  is  genuine. 

b.  That  the  drawer's  balance  is  good  for  the  amount  named. 

c.  That  it  holds  itself  responsible  for  the  payment  of  the  check. 

2.  Certification  does  not  guarantee  the  following : 

a.  That  the  indorsements,  if  any,  are  genuine. 

b.  That  the  check  was  drawn  in  good  form.  If  a  check  is  so  carelessly  drawn 

that  it  can  be  raised  easily,  and  is  certified  afterwards,  a  bank  can  be 
held  for  only  the  amount  for  which  the  check  was  first  drawn. 


220  BOOKKEEPING 

Write  a  letter  to  D.  W.  Simpson  &  Co.,  inclosing  the  above  check 
and  ordering: 

50  bx.  Sunlight  Soap  6  cases,  100  sacks,  P.  P.  Flour 

125  bx.  Wool  Soap  50  cases,  1000  sacks,  C.  P.  Flour 

60  bx.  Water  LHy  Soap  20  bbl.,  1200  lb.,  0.  Crackers 

20  bbl,  1200  lb.,  C.  S.  Crackers 

Saturday,  Sept.  22 

Pay  by  check  David  R.  Warriner's  sight  draft  on  Arthur  M.  Black, 
*50,  Form  15. 

Charge  Black's  private  account. 

Monday,  Sept.  24 

A  telegraphic  dispatch  has  been  received  from  W.  D.  Greene,  Dans- 
ville,  ordering  the  following  to  be  sent  by  express,  C.O.D. : 

2  cases  R.  Baking  Powder  3  bx.,  150  lb.,  E.  Apples 

Prepare  the  necessary  papers  and  enter  under  C.O.D.  Accounts  in  the  sales  book. 

The  following  orders  were  received  in  this  morning's  mail. 

1.  From  Williams,  Harmon  &  Co.,  Troy : 

10  bbl.  L.  L.  Salt  10  bbl.  S.  P.  Flour 

10  half  chests,  750  lb.,  C.  J.  Tea       5  bbl.,  800  lb,  L.  Starch 
5  bbl.,  1500  lb.,  Br.  C  Sugar 

Fill  the  order.    Terms  :  2/5,  net  30  da. 

Prepare  the  bill  of  lading.  Place  the  bill  and  the  receipt  in  an  envelope  and  hand 
it  in.    Do  this  with  all  similar  orders. 

2.  From  T.  B.  Welch  &  Co.,  Medford: 

6  bbl.,  300  gal.,  K  O.  Molasses       5  bbl.,  1625  lb.,  F.  G.  Sugar 
6  bbl.,  300  gal.,  P.  E.  Molasses     10  bags  Ice-cream  Salt 

Fill  the  order.    Terms :  2/5,  net  30  da. 

•The  account  of  Fred  W.  ,Hill  &  Co.,  Rome,  is  23  da.  past  due.  Draw 
a  sight  draft  on  them  in  favor  of  your  firm  for  |1200  and  leave  it  with 
the  bank  for  collection. 

Indorse  the  draft.  No  entry  is  required.  Write  a  letter  to  Fred  W.  Hill  &  Co., 
telling  them  of  the  draft  you  have  drawn. 

Take  the  note  of  F.  Moore  from  the  Unpaid  Bills  envelope  and  offer 
it  for  discount  at  your  bank,  Form  5. 

Indorse  the  note,  make  out  a  discount  memorandum  and  pin  it  to  the  note.  Place 
the  note  in  the  pass  book ;  take  it  to  the  bank,  and  receive  credit  for  the  proceeds. 


SET  VI.   WHOLESALE  GROCERY  221 

Pay  the  balance  due  Bates,  Aldrich  &  Co.,  less  5%,  by  a  New  York 
draft,  Form  16. 

Buy  the  draft  by  check.    Exchange,  50^. 

Indorse  the  draft  and  inclose  it  in  a  letter. 


POINTS  TO  BE  OBSERVED  IN  WRITING  A  LETTER  OF  REMITTANCE 

1.  State  what  is  inclosed,  —  note,  draft,  etc. 

2.  Give  the  amount  of  the  inclosure. 

3.  Generally  write  the  amount  of  the  inclosure  in  words  and  figures,  thus  :  Twenty- 
four  and  ^26^  Dollars  ($24.25). 

4.  State  how  the  amount  inclosed  is  to  be  applied. 

5.  Fold  the  inclosure  within  the  letter  properly.    (See  Form  I,  Appendix  F.) 

Receive  of  F.  W.  Earl  &  Co.,  Weedsport,  a  New  York  draft  for  |950, 
in  full  for  invoice  of  Aug.  24,  Form  17. 

Receive  of  D.  L.  Hinman  &  Co.  their  check,  in  full  of  account,  less 
2%,  Form  18. 

The  Enterprise  Carting  Co.  has  delivered  to  you  the  goods  ordered  of 
Walter  Baker  &  Co.  on  Sept.  19,  Form  19. 

A  telegraphic  order  has  just  been  received  from  W.  L.  Anderson, 
Perth  Amboy,  for : 

10  bbl.  R.  P.  Flour  1500  lb.  P.  Tapioca 

25  cases  C.  Baking  Powder  10  bbl.,  1600  lb.,  G.  G.  Starch 

Fill  the  order.    Terms :   2/5,  net  30  da. 

Deposit  the  check  and  the  New  York  draft  on  hand. 

Draw  a  cash  check  for  office  expenses,  $25. 

Make  no  entry  in  the  cashbook.   Ask  for  $5  in  change. 

Note.  A  daily  statement  shows  the  cash  balance,  a  list  of  the  journal  entries,  the  sales, 
and  the  purchases. 

Prove  the  cash  and  make  out  a  daily  statement.  Take  all  books  to  the 
instructor  for  criticism.    Proceed  to  post  as  follows : 

1.  Post  the  items  in  the  Accounts  Receivable  section  of  the  cashbook 
to  the  credit  of  the  proper  accounts  in  the  sales  ledger. 

2.  Post  the  items  in  the  General  column  on  the  left  side  of  the  cash- 
book  to  the  credit  of  the  various  accounts  in  the  general  ledger. 

3.  Post  the  items  in  the  Accounts  Payable  section  of  the  cashbook  to 
the  debit  of  the  various  accounts  in  the  purchase  ledger. 

4.  Post  the  items  in  the  General  column  on  the  right  side  of  the  cash- 
book  to  the  debit  of  the  various  accounts  in  the  general  ledger. 


222  BOOKKEEPING 

5.  Post  the  sales  from  the  sales  book  to  the  debit  of  the  different 
accounts  in  the  sales  ledger. 

6.  Post  the  purchases  from  the  invoice  book  to  the  credit  of  the  dif- 
ferent accounts  in  the  purchase  ledger. 

7.  Hand  all  books  to  the  instructor  for  approval  before  proceeding 
with  the  next  day's  business. 

Tuesday,  Sept.  25 

The  following  orders  were  received  in  this  morning's  mail : 

1.  From  L.  P.  Ross,  Warsaw : 

12  bbl.,  3900  lb.,  St.  A  Sugar 

25  half  chests,  1750  lb.,  M.  Y.  H.  Tea 

15  bbl.,  4875  lb.,  F.  O.  Sugar 

10  pkg.  S.  Yeast  Cakes 

You  are  not  familiar  with  the  financial  standing  of  this  firm,  and  so 
ship  the  goods  to  the  order  of  The  Union  Bank,  less  2%. 

\   ^v^-v  '  The  purchaser  consents  to  this  form  of  shipment. 

■A^_,<^1_-.^- — '^^Enter  the  amount  in  the  sales  book  under  C.O.D.  Accounts.    Draw  a  sight  draft 
^  in  favor  of  your  firm,  indorse  it,  and  attach  it  to  the  bill  of  lading ;  leave  it  with  the 

bank  for  collection. 

2.  From  Clinton,  Jones  &  Co.,  Allston : 

10  bbl.,  3300  lb.,  Wh.  C  Sugar  15  pails  No.  1  Mackerel 

5  bbl.,  800  lb.,  L.  Starch  25  pkg.  G.  Matches 
10  pkg.  S.  Yeast  Cakes  5  bbl.  C.  R.  Oatmeal 

15  cases  Horse-radish 

A  New  York  draft  is  inclosed   in  settlement  of   the  bill,  less  2%, 
Form  20. 

Write  the  invoice,  and  prepare  a  bill  of  lading  in  the  regular  way.    Deduct  the 
discount  and  receipt  the  bill.    Only  the  proceeds  are  entered  in  the  cashbook. 

3.  From  James  K.  Lusk,  City : 

25  cases  D.  Salad  Dressing  50  cans  B.  Cocoa 

6  cases,  120  sacks,  C.  P.  Flour  250  lb.  E.  Chocolate  Drops 

15  bbl.,  750  gal.,  N.  0.  Molasses 

Fill  the  order.    Terms :  2/5,  net  30  da. 

4.  From  F.  E.  Rogers,  City : 

15  bx.,  300  lb.,  L.  L.  Raisins  10  bx.  P.  Matches 

5  bbl.,  250  gal.,  P.  R.  Molasses  10  bu.  N.  Y.  Medium  Beans 


SET  VI.    WHOLESALE  GROCERY  223 

Fill  the  order.  Terms:  sight  draft  in  5  da.  for  the  amount  of  the 
bill,  less  2%. 

Draw  the  draft,  dating  it  Oct.  1  (Sept.  30  will  be  Sunday),  and  place  it  in  the 
Business  Cash  envelope. 

What  is  the  custom  in  your  state  regarding  paper  that  falls  due  on  Sunday  ? 

The  old  account  of  Williams,  Harmon  &  Co.,  Troy,  is  several  days 
past  due.  Draw  a  sight  draft  on  them  for  $3126.30,  and  leave  it  with 
The  Union  Bank  for  collection. 

Write  a  letter  to  Williams,  Harmon  &  Co.,  telling  them  of  the  sight  draft  you 
have  drawn. 

The  goods  ordered  of  Smith,  Perkins  &  Co.  on  Sept.  19  have  been 
received,  Form  21. 

Place  the  following  orders  over  the  telephone: 

1.  With  Geo.  H.  Buell  &  Co.,  City: 

240  bu.  N.  Y.  Medium  Beans         25  bx.,  1250  lb.,  E.  Apples 
200  lb.  E.  Raspberries 

2.  With  J.  E.  Seel  &  Co.,  City : 

50  bbl.  L.  L.  Salt  25  pails  M.  C.  Candy 

500  lb.  S.  M.  Candy 

The  note  of  A.  J.  Weaver  &  Co.,  payable  at  The  Union  Bank,  the 
payment  of  which  was  assumed  by  your  firm,  is  due  to-day. 

Issue  a  check  in  payment. 

Receive  of  Frank  Moore  &  Son,  City,  their  note  at  10  da.  for  1745.69, 
to  apply  on  account.  Form  22. 

Receive  a  check  of  Salisbury,  Gray  &  Co.  in  full  for  the  invoice  of 
Sept.  2,  $260.51,  Form  23. 

Receive  a  check  of  J.  D.  Manning  in  full  for  the  invoice  of  Aug.  25, 
$600,  Form  24. 

Pay  by  check  the  bill  of  R.  O.  Merrill  &  Co.  for  packing  boxes,  etc., 
$9.50,  Form  25. 

Pay  James  Burrill  cash  for  shoeing  horses,  $2.50. 

Deposit  the  checks  and  the  New  York  draft  on  hand.  The  bank 
charges  y^^%  collection  on  the  checks. 

Make  out  a  daily  statement.  If  it  is  correct,  post  the  different  books 
as  instructed  on  Sept.  24.    Post  the  journal  entry. 

After  the  posting  is  finished,  hand  all  books  to  the  instructor  for  examination 
and  approval. 


224  BOOKKEEPING 

Wednesday,  Sept.  26 

Goods  ordered  yesterday,  over  the  telephone,  of  Geo.  PI.  Buell  &  Co. 
have  been  dehvered,  Form  26. 

Goods  ordered  of  J.  E.  Seel  &  Co.  have  also  been  delivered,  Form  27. 

Receive  of  T.  B.  Welch  &  Co.  their  check,  in  full  for  the  invoice  of 
Sept.  24,  less  2%,  Form  28.  In  the  letter  inclosing  the  check  they  order 
the  following : 

25  bx.  Wool  Soap  5  bbl.,  1650  lb.,  Wh.  C  Sugar 

25  bx.  Water  Lily  Soap  5  bbl.,  1625  lb.,  F.  G.  Sugar 

5  bbl.,  1500  lb.,  Br.  C  Sugar         10  half  chests,  600  lb.,  F.  0.  Tea 

Fill  the  order.    Terms :   2/5,  net  30  da. 

Telegraph  Walter  L.  Mann  &  Co.,  Boston,  ordermg  the  following  to 
be  shipped  by  fast  freight : 

50  bx.  Mucilage  50  cases  C.  Baking  Powder 

Limit  the  message  to  eleven  words.    Pay  50^  charges  in  cash. 

Leave  the  note  of  Walter  L.  Parker  with  The  Union  Bank  for  collec- 
tion, Form  6. 

The  note  is  in  the   Unpaid  Bills  envelope. 
Make  the  proper  memorandum  in  the  bill  book. 

Pay  Walter  Baker  &  Co.'s  invoice  of  Sept.  22,  less  3%,  by  a  New 
York  draft,  which  you  buy  by  check  at  The  Union  Bank,  Form  29. 
Exchange,  75(^. 

Write  a  letter  and  inclose  the  draft. 

Receive  returns  for  the  C.O.D.  shipment  to  W.  D.  Greene,  Dansville, 
on  Sept.  24,  Form  30. 

Receive  of  Williams,  Harmon  &  Co.  a  New  York  draft  for  invoice  of 
Sept.  24,  less  2%,  Form  31. 

W.  D.  Packard  &  Co.,  City,  order : 

10  pails  No.  1  Mackerel  20  1-lb.  cans  H.  Cocoa 

3  cases  C.  Baking  Powder  10  bags,  1250  lb.,  P.  R.  Coffee 

10  mats,  750  lb.,  F.  J.  Coffee 

Bill  the  above  3/5,  net  60  da. 

This  is  a  reliable  firm,  and  you  expect  large  orders  from  them  frequently ;  hence 
the  above  terms. 

The  firm  pays  Geo.  N.  Cooper  $125  by  check  for  one  carriage  horse, 
to  be  charged  to  Student's  private  account. 


SET  VI.   WHOLESALE  GROCERY  225 

Receive  of  Salisbury,  Gray  &  Co.  a  sight  draft,  on  J.  E.  Seel  &  Co., 
City,  for  |50,  Form  32.  Remit  the  draft  by  letter  to  J.  E.  Seel  & 
Co.,  and  make  an  entry  in  the  journal. 

J.  D.  Manning,  Albany,  orders : 

10  bags,  1250  lb.,  P.  R.  Coffee  10  bales,  1500  lb.,  G.  M.  Cofeee 

20  mats,  1500  lb.,  F.  J.  Coffee 

Fill  the  order.    Terms :  2/5,  net  30  da. 

Deposit  the  money  received  from  the  C.O.D.  shipment,  and  the  check 
and  the  New  York  draft  on  hand.  The  bank  charges  35(^  collection  on 
the  check. 

Be  sure  to  deduct  the  collection  on  the  deposit  ticket. 

Make  out  a  daily  statement  and  have  it  corrected.  Post  as  previously 
explained. 

Present  all  books  to  the  instructor  for  approval. 

Thursday,  Sept.  27 

The  Enterprise  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  Stickney,  Poor  &  Co.  on  Sept.  21,  Form  33. 

Remit  Gray,  Dunkle  &  Co.,  Chicago,  your  note  at  15  da.,  to  apply  on 
account,  flOOO. 

Write  a  letter  and  inclose  the  note. 

Receive  of  W.  L.  Anderson  his  check  for  |400,  to  apply  on  account. 
Form  34. 

The  following  orders  were  received  by  mail  to-day. 

1.  From  Fred  W.  Hill  &  Co.,  Rome : 

75  1-lb.  cans  H.  Cocoa  50  lb.  E.  Raspberries 

3  bx.,  120  lb.,  C.  Codfish  10  bx.,  240  lb.,  H.  L.  Chocolate 

Fill  the  order.    Terms  :  2/5,  net  30  da. 

2.  From  D.  L.  Hinman  &  Co.,  City : 

10  half  chests,  750  lb.,  C.  J.  Tea  3  bags  Ice-cream  Salt 

5  half  chests,  300  lb.,  F.  0.  Tea  3  bbl.,  480  lb.,  H.  W.  Starch 

10  half  chests,  700  lb.,  M.  Y.  H.  Tea 

Fill  the  order.    Terms :  2/5,  net  30  da. 

Discount  at  The  Union  Bank  Frank  Moore  &  Son's  note  received  on 
Sept.  25.  The  proceeds  are  placed  to  your  credit. 

Make  out  a  discount  memorandum  and  pin  it  to  the  note.    Place  it  in  the  pass 
book  and  hand  it  to  the  bank. 
Make  the  proper  records. 


226  BOOKKEEPIXG 

Your  bank  informs  you  that  the  sight  draft  drawn  on  Ered  W.  Hill 
&  Co.,  Rome,  on  Sept.  24  has  been  collected.    Collection,  y^%. 

Have  the  amount  entered  in  the  pass  book,  and  make  the  proper  records  in  the 
other  books. 

Give  A.  W.  Weet  your  check  for  $65  to  be  charged  to  the  private 
account  of  Geo.  H.  Dobbin. 

Goods  ordered  of  Gray,  Dunkle  &  Co.  on  Sept.  21  have  been  de- 
livered. Form  35. 

Deposit  the  check  on  hand.    No  collection  is  charged. 

Make  out  a  daily  statement  and  have  it  examined,  after  which  post 
the  different  books  in  the  regular  way. 

Hand  all  books  to  the  instructor  for  approval. 

Friday,  Sept.  28 

Receive  of  James  K.  Lusk,  City,  a  letter  inclosing  a  check,  in  pay- 
ment of  the  invoice  of  Sept.  25,  less  2%,  Form  36.  He  also  orders  the 
following  items : 

10  bx.  Sunlight  Soap  50  lb.  Pearl  Tapioca 

3  bbl.,  480  lb.,  G.  G.  Starch 

Fill  the  order.    Terms :  2/5,  net  30  da. 
Salisbury,  Gray  &  Co.,  Rochester,  order: 

15  bbl.  R.  P.  Flour  4  bbl.,  200  gal.,  K  0.  Molasses 

10  bbl.  L.  L.  Salt  20  bx.  Wool  Soap 
10  bbl.,  3250  lb.,  St.  A  Sugar  5  bbl.,  1500  lb,  Br.  C  Sugar 

25  bx.  P.  Matches  10  bx.  Butter  Color 

5  pails  No.  1  Mackerel  15  doz.  pint  cans  Olives 
5  bx.,  250  lb.,  C.  Raisins  5  bbl.  C.  R.  Oatmeal 

Fill  the  order.    Terms  :  3/5,  net  30  da. 

The  Enterprise  Carting  Co.  has  just  delivered  to  you  the  goods 
ordered  of  Bates,  Aldrich  &  Co.  on  Sept.  21,  Form  37. 

Give  Geo.  H.  Buell  &  Co.  your  note  at  30  da.,  with  interest  at  6%, 
for  the  net  amount  of  the  invoice  of  Sept.  26. 

A  telegraphic  order  has  just  been  received  from  W.  M.  Beach,  Pitts- 
field,  for: 

3  half  chests,  225  lb,  C.  J.  Tea         50  lb.  Flake  Tapioca 

He  requests  that  the  goods  be  shipped  by  express,  C.O.D. 
Fill  the  order.    Terms:  cash,  less  1%. 


SET  VL    WHOLESALE  GROCERY  227 

Goods  ordered  of  D.  W.  Simpson  &  Co.,  Chicago,  on  Sept.  21  have 
been  delivered,  Form  38. 

Remit  Bates,  Aldrich  &  Co.  a  New  York  draft,  in  full  for  the  goods 
received  to-day,  less  3%,  Form  39.  Buy  the  New  York  draft  by  check. 
Exchange,  75^. 

Indorse  the  draft  and  inclose  it  in  a  letter. 

Deposit  the  check  on  hand. 

Your  bank  informs  you  that  the  draft  drawn  on  Williams,  Harmon 
&  Co.  on  Sept.  25  has  been  collected.    Collection,  y^%. 

Have  the  amount  entered  in  the  pass  book,  and  make  the  proper  entries  in  the 
other  books. 

Make  out  a  daily  statement.    Post. 
Hand  all  books  to  the  instructor  for  approval. 

Saturday,  Sept.  29 
Draw  from  the  bank  by  a  cash  check  for  office  expenses,  $50. 
Ask  for  ten  five-dollar  bills. 

The  following  orders  have  been  received  by  mail  to-day. 

1.  From  W.  D.  Packard  &  Co.,  City : 

10  half  chests,  750  lb.,  C.  J.  Tea       10  half  chests,  600  lb.,  F.  0.  Tea 
5  bbl.,  800  lb.,  L.  Starch 

They  inclose  check  in  payment  of  the  invoice  of  Sept.  26,  less  3%, 
Form  40. 

Fill  the  order.    Terms :  2/10,  net  60  da. 

2.  From  D.  L.  Hinman  &  Co.,  City : 

20  bags  Ice-cream  Salt  50  bbl.  L.  L.  Salt 

10  bbl.,  3250  lb.,  St.  A  Sugar  10  bbl.,  3250  lb.,  F.  G.  Sugar 

10  bbl.,  600  lb.,  O.  Crackers  10  bbl.,  600  lb.,  C.  S.  Crackers 

They  inclose  their  note  at  10  da.  for  $500,  to  apply  on  account. 
Form  41. 

Fill  the  order.    Terms :   2/5,  net  30  da. 

3.  From  Frank  Moore  &  Son,  City : 

6  bx.,  300  lb.,  E.  Apples  5  bx.,  125  lb.,  E.  Apricots 

15  bbl.,  4875  lb.,  St.  A  Sugar  10  pails  M.  C.  Candy 

500  lb.  S.  M.  Candy 

kFill  the  order.    Terms :   2/5,  net  30  da. 
Pay  John  Harvey  cash  for  cleaning  the  store,  |5.    Also  pay  salaries 


228  BOOKKEEPING 

Your  bank  informs  you  that  the  sight  draft  attached  to  the  bill  of 
lading  and  left  with  your  bank  for  collection  Sept.  25  has  been  paid. 
Collection,  ^^^o- 

Have  the  amount  entered  in  the  pass  book. 

Pay  by  check  Enterprise  Carting  Co.'s  bill  for  freight  and  drayage  to 
date,  177.75,  Form  42. 

Charge  Merchandise. 

Pay  William  Jennings  |15  by  check  for  keeping  and  feeding  horses 
to  date. 

Make  a  journal  entry  crediting  the  Proprietors'  private  accounts  with 
one-half  month's  salary  for  September. 

Charge  Expense,  and  credit  each  proprietor  for  one  half  the  monthly  salary  agreed 
upon  in  the  articles  of  copartnership. 

Receive  cash  for  subrental  of  a  part  of  the  store,  |65. 

Get  the  cash  at  the  office  or  of  the  instructor  and  credit  Rent  account. 

•Make  out  a  daily  statement  and  hand  it  in. 
Post  as  instructed  for  previous  days. 


Closing  the  Work  for  September 

1.  Study  the  explanation  of  the  model  cashbook  illustrated  on  pages 
204  and  205.  Close  the  cashbook,  and  follow  all  the  details  of  the  model 
very  carefully. 

Note  that  the  closing  of  the  Discount  column,  on  either  side,  is  accomplished  by 
a  journal  entry. 

The  model  does  not  show  the  total  column  under  cash  receipts,  but  this  column 
will  be  found  in  your  blank  books.  In  closing  the  cash  receipts  carry  all  totals  to 
this  column. 

2.  Post  the  summary  of  the  cashbook  to  the  general  ledger. 

3.  Study  the  illustration  and  the  explanation  of  the  sales  book,  page 
201.  Make  the  proper  entry  to  close  it.  Post  the  entry  to  the  general 
ledger. 

4.  Study  the  illustration  and  the  explanation  of  the  invoice  book, 
page  206.  Make  the  proper  entry  to  close  it.  Post  the  entry  to  the 
general  ledger. 

5.  Study  the  illustration  and  the  explanation  of  the  journal,  page 
208.  Make  the  proper  entry  to  close  it.  Post  the  entry  to  the  general 
ledger. 


SET  VI.   WHOLESALE  GROCERY  229 

6.  Prove  the  sales  ledger  by  an  abstract  similar  to  the  following : 
Abstract  of  Sales  Ledger,  September  30,  19 — 


12 

Wm.  B.  Tenny  &  Co. 

920 

14 

D.  M.  McCarthy 

1291 

50 

16 

J.  A.  Merrill  &  Son 

9120 

16 

R.  W.  White  &  Son 

492 

20 

Baker,  Hillis  &  Co. 

162 

50 

21 

J.  E.  Bender 

1250 

22 

Wm.  A.  Conway 

1120 

24 

Morgan,  Wright  &  Co. 

962 

50 

25 

Kendall  Mfg.  Co. 

162 

90 

26 

F.  E.  Moore 

865 

29 

C.  W.  Gray 

120 

31 

G.  H.  Dunkle 

m 

25 

24 

Balance  per  Accts.  Rec.  in  G.  L. 

16532 

65 

16532 

65 

16532 

65 

7.  Prove  the  purchase  ledger  by  an  abstract  similar  to  the  following 
Abstract  of  Purchase  Ledger,  September  30,  19 — 


18 

Jordan,  Marsh  &  Co. 

6142 

50 

19 

Morgan,  Traver  &  Co. 

3150 

21 

Gray,  Salisbury  &  Co. 

1250 

24 

Williams  &  Rogers 

925 

26 

C.  H.  Lyman  &  Son 

2100 

27 

M.  A.  Weaver  &  Co. 

1650 

29 

J.  E.  King,  Son  &  Co. 

1122 

10 

30 

M.  F.  Raymond 

4698 

20 

31 

E.  R.  Barnard  &  Co. 

162 

90 

46 

Balance  per  Accts.  Pay,  in  G.  L. 

21200 

76 

21200 

76 

21200 

76 

8.  Have  the  abstracts  approved  by  the  instructor.   If  they  are  cor- 
rect, make  a  trial  balance  from  the  general  ledger. 

9.  Have  the  trial  balance  approved. 

10.  Prove  the  bill  book. 

11.  Hand  all  books  to  the  instructor  for  examination. 
Remember  the  monthly  statement  of  your  bank  account. 


230 


BOOKKEEPING 


EXERCISE  60 

A  Written  Review 

The  following  review  exercises  are  suggested. 

1.  Make  the  usual  statements  from  the  following  trial  balance 


A.  L.  Persons,  Prop. 

18000. 

Harry  K.  Leslie,  Prop. 

7000. 

Cash 

$448.45 

Deposit  in  First  National  Bank 

2036.85 

Merchandise 

8090.55 

Real  Estate 

3300.55 

Expense- 

203.20 

Taxes 

60.40 

Horse  and  Wagon 

280. 

Office  Fixtures 

177.60 

Interest 

27.45 

Salaries 

324.90 

Accounts  Receivable 

1258.25 

Accounts  Payable 

2218.40 

Bills  Receivable 

155.20 

B.  &  0.  R.R.  Stock 

1800. 

Bills  Payable 

1100. 

A.  L.  Persons,  Priv.  Acct. 

95. 

Harry  K.  Leslie,  Priv.  Acct. 

60. 

$18318.40 

$18318.40 

Inventories                                                   Resource 

LiahUlty 

Merchandise 

19150. 

$95.10 

Real  Estate 

3250. 

60. 

Expense 

48.90 

Interest 

15.25 

20  shares  of  B.  &  0.  R.R.  Stock  at  par 

Horse  and  Wagon  at  cost,  less  10% 

Office  Fixtures : 

Typewriter  at  cost,  |70,  less  10% 

Office  Chairs  at  cost,  $40,  less  10% 

Office  Desk  at  cost,  |67.60 

2.  Journalize  the  resources  and  the  liabilities,  and  credit  the  proprietor 
for  his  net  investment.  Journalize  the  succeeding  transactions,  post  all 
to  the  ledger,  and  take  a  trial  balance.  If  the  work  is  correct,  all  the 
personal  accounts  will  balance. 


REVIEW  EXERCISES  231 

April  1.  Harold  F.  Carson  began  business  with  the  following  re- 
sources and  liabilities: 

Resources 

Merchandise  on  hand  |6925. 

Bills  Receivable  on  hand  460. 

Interest  on  above  10.50 

Cash  on  hand  1940. 

W.  F.  Gordon  on  account  465.20 

A.  W.  Dunham  on  account  1444.50 

D.  E.  Sumner  on  account  750. 

Ware  «&;  Co.  on  account  341.75 

Liabilities 

R.  W.  Owens  on  account  1260. 

J.  A.  Hazard  on  account  1020. 

Howe  &  Co.  on  account  165.20 

Mercer  &  Co.  on  account  .  250. 

Unpaid  freight  bill  104.25 

Unpaid  taxes  250. 

Bills  Payable  outstanding  420. 
Interest  on  above  3. 

4.  He  drew  a  sight  draft  on  A.  W.  Dunham  for  |1020,  in  favor  of 
J.  A.  Hazard. 

8.  He  drew  a  sight  draft  on  W.  F.  Gordon  for  |250,  in  favor  of 
H.  J.  King,  City  Treasurer,  in  payment  of  taxes  now  due. 

10.  He  drew  a  10-da.  draft  on  W.  F.  Gordon  for  $165.20,  in  favor 
of  Howe  &  Co. 

12.  He  drew  a  sight  draft  on  D.  E.  Sumner  for  $250,  in  favor  of 
Mercer  &  Co. 

15.  He  drew  a  sight  draft  on  A.  W.  Dunham  for  $424.50,  in  favor 
of  E.  R.  Maxon,  in  payment  of  his  note  and  interest.  Face  of  the  note, 
$420 ;  mterest,  $4.50. 

19.  R.  H.  Weller  remitted  a  sight  draft  on  R.  W.  Owens  for  $472.50, 
in  payment  of  his  note  and  the  interest.  Face  of  the  note,  $460  ;  interest, 
$12.50. 

22.  He  drew  a  sight  draft  on  D.  E.  Sumner  for  $500,  in  favor  of 
R.  W.  Owens. 

24.  He  drew  a  sight  draft  on  Ware  &  Co.  for  $104.25,  in  favor  of 
Fred  H.  Kerns,  Agt.,  for  a  freight  bill  now  due. 

27.  He  drew  a  sight  draft  on  W.  F.  Gordon  for  $50,  in  favor  of 
R.  W.  Owens. 

30.  He  drew  a  30-da.  draft  on  Ware  &  Co.  for  $237.50,  in  favor  of 
R.  W.  Owens. 


232  BOOKKEEPIKG 

Incoming  Business  Forms  for  October 

Before  beginning  the  business  practice  for  October,  read  the  explanatory  note 
preceding  the  Incoming  Business  Forms  for  September,  page  209. 

Form  43.  Note  of  Frank  Moore  &  Son,  City,  dated  Oct.  1,  drawn  in 
favor  of  your  firm,  with  interest  at  6%,  payable  in  60  da. 
at  The  Union  Bank,  $500. 
Form  44.  Invoice  of  Walter  L.  Mann  &  Co.,  Boston,  dated  Sept.   29. 
Terms:  10  da.  draft,  less  1%.    Items  as  follows: 
50  bx.  Mucilage  50  cases  C.  Baking  Powder 

Deduct  the  1%  discount. 

Form  45.  Draft  of  Walter  L.  Mann  &  Co.,  Boston,  dated  Sept.  29,  drawn 

on  your  firm,  in  their  own  favor,  at  10  days'  sight,  for  the 

net  amount  of  the  above  invoice. 
Form  46.  Draft  at  10  days'  sight,  drawn  by  Smith,  Perkins  &  Co.,  New 

York,  Sept.  29,  on  your  firm,  in  favor  of  themselves,  for  |750. 
Form  47.  Check  of  Salisbury,  Gray  &  Co.,  Rochester,  dated  Oct.  1,  drawn 

on  Traders  National  Bank,  in  favor  of  your  firm,  for  |602.37. 
Form  48.  Check  of  D.  L.  Hinman  &  Co.,  City,  dated  Oct.  2,  drawn  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  $632.05. 
Form  49.  Invoice  of  Geo.  H.  Buell  &  Co.,  City,  dated  Oct.  3.    Terms :  a 

30-day  note  in  10  da.,  with  interest  at  6  %.  Items  as  follows: 

100  bu.  N.  Y.  Medium  Beans  150  bx.  E.  Apples 

500  lb.  E.  Raspberries 

Form  50.  Sight  draft  of  D.  W.  Smith  &  Co.,  New  York,  dated  Oct.  2, 

drawn  on  your  firm,  in  favor  of  themselves,  for  |900,  and 

indorsed  by  them  to  the  First  National  Bank,  New  York. 

Transferred  by  the  First  National  Bank  to  The  Union  Bank 

of  your  place,  W.  O.  King,  Cashier. 
Form  51.  Draft  of  The  Union  Bank,  City,  on  Chemical  National  Bank, 

New  York,  dated  Oct.  3,  drawn  in  favor  of  your  firm,  for 

$500,  W.  B.  Frey,  Cashier. 
Form  52.  Check  of  Frank  Moore  &  Son,  City,  dated  Oct.  2,  drawn  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  $348.14. 
Form  53.  Sight  draft  of  T.  B.  Welch  &  Co.,  Medford,  dated  Oct.  2,  on 

D.  O.  Mosher,  City,  drawn  in  favor  of  your  firm,  for  $79.60. 
Form  54.    Q.  O.D.    envelope.    Data   as    follows :     cash    inclosed,    $80.32. 

Goods  were  shipped  by  your  firm  to  W.  M.  Beach,  Pittsfield, 

Sept.  28. 

See  note  under  Form  30,  page  212. 


SET  VI.    WHOLESALE  GROCERY  233 

Form  55.  Draft  of  Traders  National  Bank,  Albany,  on  Chemical  National 

Bank,  New  York,  dated  Oct.  3,  drawn  in  favor  of  J.  D. 

Manning  and  transferred  to  your  firm  by  full  indorsement, 

for  1919.24,  D.  O.  Morehouse,  Cashier. 
Form  56.  Invoice  of  Bates,  Aldrich  &  Co.,  Boston,  dated  Oct.  3.  Terms : 

3/5,  net  30  da.    Items  as  follows : 

200  l-lb.  cans  Huyler's  Cocoa  100  bbl.  S.  P.  Flour 

Form  57.  Draft  of  The  Union  Bank,  City,  dated  Oct.  4,  drawn  on  Chemi- 
cal National  Bank,  New  York,  in  favor  of  your  firm,  for 
$500,  W.  B.  Frey,  Cashier. 

Form  58.  Sight  draft  of  D.  W.  Smith  &  Co.,  New  York,  dated  Oct.  3,  on 
your  firm,  in  favor  of  C.  W.  Mobray,  City,  for  |300. 

Form  59.  Invoice  of  Smith,  Perkins  &  Co.,  New  York,  dated  Oct.  3. 
Terms :  5/10,  net  30  da.    Items  as  follows : 

100  bags  P.  R.  Coffee  100  half  chests  F.  0.  Tea 

50  half  chests  C.  J.  Tea 

Form  60.  Olney  P.  Davis  &  Co.'s  draft,  dated  City,  Oct.  5,  at  1  day's  sight, 

on  Arthur  M.  Black,  in  favor  of  themselves,  for  $75.96. 
Form  61.  Check    of    F.    W.    Earl    &    Co.,    Weedsport,    dated    Oct.    4, 

drawn  on  Traders  National  Bank,  in  favor  of  your  firm,  for 

$1605.48. 
Form  62.  Invoice   of  Walter  Baker  &  Co.,  New  York,  dated  Oct.  4. 

Terms :  3/5,  net  30  da.    Items  as  follows  : 

500  l-lb.  cans  Baker's  Cocoa  100  bx.  Baker's  Chocolate 

Form  63.  Invoice  of  Gray,  Dunkle  &  Co.,  Chicago,  dated  Oct.  4.  Terms : 
3/10,  net  30  da.    Items  as  follows: 

50  bbl.  Br.  C  Sugar  100  bbl.  Wh.  C  Sugar 

25  half  chests  M.  Y.  H.  Tea 

Form  64.  Draft  of  Traders  National  Bank,  Dansville,  on  Chemical 
National  Bank,  New  York,  dated  Oct.  5,  drawn  in  favor  of 
W.  D.  Greene  and  transferred  to  your  firm  by  full  indorse- 
ment, for  $262.15,  W.  E.  Traver,  Cashier. 

Form  65.  Check  of  W.  D.  Packard  &  Co.,  City,  dated  Oct.  6,  drawn 
on  Traders  National  Bank,  in  favor  of  your  firm,  for 
$586.53. 

Form  66.  Sight  draft  of  Salisbury,  Gray  &  Co.,  Rochester,  dated 
Oct.  5,  drawn  on  J.  E.  Seel  &  Co.,  in  favor  of  your  firm, 
for  $76.42. 


234  BOOKKEEPING 

Memoranda  of  Transactions  for  October  • 
Monday,  Oct.  1 

The  following  orders  were  received  in  this  morning's  mail. 

1.  From  F.  W.  Earl  &  Co.,  Weedsport : 

25  half  chests  F.  0.  Tea  10  bx.  W.  L.  Soap 

25  half  chests  C.  J.  Tea  10  bbl.  F.  G.  Sugar 

Fill  the  order.    Terms :  2/5,  net  30  da. 

2.  From  J.  D.  Manning,  Albany : 

10  bbl.  St.  A  Sugar  10  bu.  IST.  Y.  Medium  Beans 

5  bbl.  F.  G.  Sugar  10  bx.  H.  0.  Oatmeal 

25  doz.  bottles  M.  Pickles  25  bx.  H.  L.  Chocolate 

50  bx.  L.  L.  Raisins  25  bx.  E.  Chocolate  Drops 
5  bales  G.  M.  Coffee  5  pails  No.  1  Mackerel 

10  bx.  E.  Apples  10  bx.  Butter  Color 

Fill  the  order.    Terms :  2/5,  net  30  da. 

3.  From  R.  D.  Fowler  &  Co.,  City : 

5  bbl.  S.  P.  Flour  3  bx.  Butter  Color 

5  bbl.  R.  P.  Flour  3  bbl.  C.  R.  Oatmeal 

20  bx.  C.  Codfish 

Fill  the  order.  Terms:  sight  draft  in  5  da.  for  the  amount  of  the 
bill,  less  2%. 

Draw  a  sight  draft,  date  it  ahead  5  da.,  and  place  it  in  the  Business  Cash  envelope. 
Deduct  the  discount  on  the  invoice  and  in  the  sales  book.  Do  not  count  this  draft 
in  proving  cash. 

The  Union  Bank  informs  you  that  the  note  of  Walter  L.  Parker, 
left  for  collection  on  Sept.  26,  has  been  credited  to  your  account  at  its 
face  value. 

Discount  at  The  Union  Bank  Benton  Bros.  &  Co.'s  note,  bought  by 
your  firm  of  A.  J.  Weaver  &  Co.,  and  receive  credit  for  the  proceeds. 
Form  7. 

Receive  of  Frank  Moore  &  Son  their  note,  at  60  da.,  with  interest  at 
6%,  for  $500,  Form  43. 

The  Enterprise  Carting  Co.  has  just  delivered  to  you  the  goods  ordered 
of  Walter  L.  Mann  &  Co.  on  Sept.  26. 

Look  up  the  invoice.  Form  44,  and  handle  it  in  the  regular  way.  Take 
the  draft  which  they  inclosed.  Form  45,  and  accept  it.  Place  the  draft 
in  an  envelope,  properly  addressed,  and  hand  it  in. 


SET  VI.   WHOLESALE  GROCERY  235 

An  order  has  just  been  received  from  Clinton,  Jones  &  Co.,  Allston, 
for  the  following : 

10  bx.  Mucilage  10  half  chests  M.  Y.  H.  Tea 

10  cases  C.  Baking  Powder  10  bales  G.  M.  Coffee 

10  bbl.  St.  A  Sugar  10  bags  P.  R.  Coffee 

Fill  the  order.    Terms  :  2/5,  net  30  da. 

Write  letters,  ordermg  the  following  goods : 

1.  Of  Walter  Baker  &  Co.,  New  York : 

500  1-lb.  cans  Baker's  Cocoa  100  bx.  Baker's  Chocolate 

2.  Of  Smith,  Perkins  &  Co.,  New  York : 

100  bags  P.  R.  Coffee  100  half  chests  F.  0.  Tea 

50  half  chests  C.  J.  Tea 

In  a  communication  received  from  Smith,  Perkins  &  Co.  this  morning 
there  was  a  draft  at  10  days'  sight  on  your  firm,  in  favor  of  themselves, 
for  $750,  Form  46.    Accept  the  draft  and  inclose  it  in  the  above  letter. 

3.  Of  Gray,  Dunkle  &;  Co.,  Chicago : 

50  bbl.  Br.  C  Sugar  100  bbl.  Wh.  C  Sugar 

25  half  chests  M.  Y.  H.  Tea 

Inclose  your  check  in  payment  of  the  invoice  of  Sept.  26,  less  3%, 
and  the  proceeds  of  your  note,  in  their  favor,  due  Oct.  12. 

Deduct  the  discount  from  the  face  of  the  note,  add  the  proceeds  of  the  note  to  the 
net  amount  of  the  bill,  and  write  a  check  to  cover  the  total  amount.  Have  the  letter 
approved  before  inclosing  the  check. 

Write  Bates,  Aldrich  &  Co.,  Boston,  ordering  the  following  goods : 

200  1-lb.  cans  Huyler's  Cocoa  100  bbl.  S.  P.  Flour 

Telephone  Geo.  H.  Buell  &  Co.,  City,  the  following  order : 

100  bu.  N.  Y.  Medium  Beans  150  bx.  E.  Apples 

500  lb.  E.  Raspberries 

An  order  has  just  been  received  from  Williams,  Harmon  &  Co., 
Troy,  for: 

200  1-lb.  cans  Baker's  Cocoa  25  bx.  Baker's  Chocolate 

25  half  chests  F.  0.  Tea  25  half  chests  C.  J.  Tea 

10  bbl.  S.  P.  Flour 

Fill  the  order.    Terms :   2/10,  net  60  da. 

Give  Smith,  Perkins  &  Co.  a  check  for  the  invoice  of  Sept.  10,  less 
S%.    The  amount  of  the  mvoice  is  1947.60. 


236  BOOKKEEPING 

Take  the  draft  drawn  on  F.  E.  Rogers  on  Sept.  25  from  your  Business 
Cash  envelope,  indorse  it  properly,  and  deposit  it  in  the  bank. 
Deposit  all  currency  and  the  check  on  hand. 
Make  out  a  daily  statement  and  hand  it  in.    Post. 

Hand  all  books  to  the  instructor  for  approval. 

Tuesday,  Oct.  2 

The  following  orders  were  received  in  this  morning's  mail.  Fill  each 
in  the  regular  way.    Terms :   2/5,  net  30  da. 

1.  From  W.  L.  Anderson,  Perth  Amboy : 

25  half  chests  M.  Y.  H.  Tea  10  bbl.  Br.  C  Sugar 

10  bbl.  Wh.  C  Sugar  10  bales  G.  M.  Coffee 

10  bbl.  S.  P.  Flour 

2.  From  W.  D.  Greene,  Dansville : 

25  bx.  E.  Apples  50  bu.  N.  Y.  Medium  Beans 

250  lb.  E.  Easpberries 

Draw  by  a  cash  check  for  office  expenses,  |125. 
Ask  for  $5  in  change. 

Pay  cash  for  repairing  the  wagons,  ^9- 

Pay  D.  W.  Simpson  &  Co.  by  check  for  the  invoice  of  Sept.  27,  less  3%. 

Write  a  letter  and  inclose  the  check. 

Receive  a  check  of  Salisbury,  Gray  &  Co.,  Rochester,  in  payment  of 
the  invoice  of  Sept.  28,  less  3%,  Form  47. 

A  telegraphic  order  has  just  been  received  from  W.  C.  Holbrook 
&  Co.,  Resort,  for: 

10  bags  P.  R.  Coffee  10  bales  G.  M.  Coffee 

20  half  chests  C.  J.  Tea 

Ship  the  above  to  the  order  of  The  Union  Bank,  less  2%.  Deduct  the  discount  on 
the  bill  and  in  the  sales  book-  Enter  in  the  sales  book  as  a  C.O.D.  item.  Draw  a 
sight  draft  in  favor  of  yourself,  indorse  it,  attach  to  the  bill  of  lading,  and  leave 
it  with  your  bank  for  collection. 

Receive  of  D.  L.  Hinman  &  Co.  their  check,  in  payment  of  the  invoice 
of  Sept.  27,  less  2%,  Form  48. 

Engage  W.  O.  Warner  as  traveling  salesman  at  a  salary  of  |125  per 
month  and  expenses.  Give  him  a  check  for  |100  to  cover  expenses  on 
a  trip  through  adjacent  territory. 


SET  VI.  WHOLESALE  GROCEKY  237 

Engage  F.  E.  Ramsey,  who  has  been  assisting  in  the  shipping  room 
for  several  days,  as  general  assistant,  at  a  salary  of  |10.50  per  week, 
beginning  Oct.  1.   Pay  him  cash  for  services  to  date,  |4. 

Pay  by  check  S.  E.  Waldorph  for  cooperage,  $16.50. 

Deposit  the  checks  on  hand.  Collection,  J^%  on  the  check  of  Salis- 
bury.  Gray  &  Co. 

Make  out  a  daily  statement.    Post. 

Hand  all  books  to  the  instructor  for  approval. 

Wednesday,  Oct.  3 

Goods  ordered  of  Geo.  H.  Buell  &  Co.  on  Oct.  1  have  been  de- 
livered, Form  49. 

Pay  a  sight  draft  of  D.  W.  Smith  &  Co.,  in  favor  of  themselves,  by 
check,  |900,  Form  50.  The  draft  is  presented  to  you  by  The  Union 
Bank,  and  you  make  your  check  payable  to  that  institution. 

Remit  Walter  L.  Mann  &  Co.,  Boston,  a  New  York  draft,  to  apply 
on  account,  |500,  Form  51.   Buy  the  draft  by  check.   Exchange,  25(^. 

Indorse  the  draft. 

A  note  in  favor  of  Boyd,  Evans  &  Co.  is  due  to-day,  payable  at  The 
Union  Bank. 

Issue  a  check  in  payment. 

Receive  of  Frank  Moore  &  Son,  City,  their  check,  in  payment  of  the 
invoice  of  Sept.  29,  less  2%,  Form  52. 

The  letter  inclosing  the  above  check  contained  the  following  order : 

100  1-lb.  cans  Huyler's  Cocoa  15  bbl.  S.  P.  Flour 

20  bx.  E..  Apples  250  lb.  E.  Raspberries 

25  bu.  N.  Y.  Medium  Beans  10  bbl.  Wh.  C  Sugar 

Fill  the  order.    Terms :   2/5,  net  30  da. 

Draw  a  sight  draft  on  Fred  W.  Hill  &  Co.,  Rome,  in  favor  of  your 
firm,  for  $300. 

Place  the  draft  in  the  Business  Cash  envelope,  and  write  a  letter  to  Fred  W.  Hill 
&  Co.,  informing  them  of  the  draft  drawn  on  them  at  sight  through  your  bank. 

Credit  Fred  W.  Hill  &  Co.  in  the  cashbook,  as  they  have  agreed  to 
honor  the  draft  on  presentation. 

Fill  an  order  just  received  from  Williams,  Harmon  &  Co.,  Troy,  for : 

15  bbl.  L.  L.  Salt  15  bbl.  S.  P.  Flour 

25  half  chests  C.  J.  Tea  10  bbl.  Br.  C  Sugar 

Terms:  2/10,  net  60  da. 


238  BOOKKEEPING 

T.  B.  Welch  &  Co.,  Medford,  order: 

20  bbl.  N.  O.  Molasses  20  bbl.  P.  K.  Molasses 

10  bbl.  F.  G.  Sugar  5  bbl.  L.  Starch 

Fill  the  order.    Terms:   2/10,  net  60  da. 

Inclosed  in  the  above  letter  was  a  sight  draft  on  D.  O.  Mosher,  City, 
in  your  favor,  for  $79.60,  to  apply  on  account.  Form  53. 

Credit  T.  B.  Welch  &  Co.  in  the  cashbook,  as  D.  O.  Mosher  has 
agreed  to  honor  the  draft  on  presentation. 

Place  the  draft  in  the  Business  Cash  envelope. 

Receive  returns  from  the  C.O.D.  shipment  to  W.  M.  Beach,  Pitts- 
field,  Form  54. 

Deposit  the  sight  draft  of  T.  B.  Welch  &  Co.,  the  draft  drawn  on 
Fred  W.  Hill  &  Co.,  the  check  received  from  Frank  Moore  &  Son,  and 
the  returns  from  the  C.O.D.  shipment  to  W.  M.  Beach.  -J^^  collection 
on  the  draft  on  Fred  W.  Hill  &  Co. 

Make  out  a  daily  statement.    Post. 

Hand  all  books  to  the  instructor  for  approval. 

"Thursday,  Oct.  4 

The  following  orders  were  received  in  this  morning's  mail. 

1.  From  John  P.  Kennedy  &  Co.,  City : 

2  half  chests  C.  J.  Tea  10  pails  No.  1  Mackerel 

5  cases  E,.  Baking  Powder  5  bbl.  C.  R.  Oatmeal 

6  bx.  H.  L.  Chocolate  10  bx.  C.  Raisins 

5  bu.  N.  Y.  Medium  Beans  5  bbl.  N.  0.  Molasses 

20  bx.  C.  Codfish  10  bx.  Wool  Soap 

The  references  are  satisfactory  and  you  fill  the  above  order,  quoting 
your  regular  terms :   2/5,  net  30  da. 

2.  From  W.  W.  Williams,  City: 

5  half  chests  F.  0.  Tea  2  bbl.  H.  W.  Starch 

10  bags  Ice-cream  Salt  25  pkg.  N.  Yeast  Cakes 

5  bx.  W.  L.  Soap 

The  references  are  satisfactory  and  you  fill  the  order.  Terms:  2/5, 
net  30  da. 

Receive  from  J.  D.  Manning,  Albany,  a  New  York  draft,  in  settlement 
of  the  invoice  of  Oct.  l,.less  2%,  Form  55. 

The  Enterprise  Carting  Co.  has  delivered  to  you  the  goods  ordered 
of  Bates,  Aldrich  &  Co.  on  Oct.  1,  Form  56. 


SET  VI.   WHOLESALE  GKOCERY  239 

Buy  of  The  Union  Bank  a  New  York  draft,  by  check,  and  remit  it 
to  D.  W.  Smith  &  Co.,  New  York,  to  apply  on  account,  $500,  Form  57. 
Exchange,  25^. 

Remit  Smith,  Perkins  &  Co.,  New  York,  a  check  for  the  invoice  of 
Sept.  24,  less  5%. 

Deposit  the  New  York  draft  received  from  J.  D.  Manning. 

Make  out  a  daily  statement.    Post. 

Hand  all  books  to  the  instructor  for  approval. 

Friday,  Oct.  5 

Pay  D.  W.  Smith  &  Co.'s  sight  draft,  on  you,  in  favor  of  C.  W. 
Mobray,  by  check,  $300,  Form  58. 

The  Enterprise  Carting  Co.  has  just  delivered  to  you  the  goods  ordered 
of  Smith,  Perkins  &;  Co.  on  Oct.  1,  Form  59. 

The  following  orders  were  received  this  morning,  and  are  to  be  filled 
in  the  regular  way.    Terms :  2/5,  net  30  da. 

1.  From  Frank  Moore  &  Son,  City : 

10  bbl.  0.  Crackers  10  bbl.  C.  S.  Crackers 

5  bx.  C.  Codfish  10  bbl.  R.  P.  Flour 

2  bbl.  P.  R.  Molasses 

2.  From  F.  E.  Rogers,  City : 

10  bbl.  0.  Crackers  5  bbl.  C.  S.  Crackers 

2  bags  P.  R.  Coffee  2  bales  G.  M.  Coffee 

10  bx.  E.  Chocolate  Drops 

Accept,  payable  at  The  Union  Bank,  for  the  private  account  of  Arthur 
M.  Black,  Olney  P.  Davis  &  Co.'s  draft  in  favor  of  themselves,  at  1  day's 
sight,  for  $75.96,  Form  60. 

This  draft  is  the  outcome  of  some  matter  connected  with  the  private  business  of 
Arthur  M.  Black,  and  the  sum  is  charged  directly  to  his  private  account.  Enter  in 
the  journal  and  the  bill  book. 

A  call  has  just  come  over  the  telephone  from  L.  H.  Pierson,  City,  for : 

3  bbl.  0.  Crackers  10  bags  Ice-cream  Salt 
5  bbl.  C.  S.  Crackers  5  bx.  Wool  Soap 

3  bbl.  R.  P.  Flour  3  bbl.  F.  G.  Sugar 

5  bx.  Butter  Color  3  mats  F.  J.  Coffee 

He  offers  to  accept  your  draft  at  20  da.  from  date  of  the  bill  for  the 
amount. 

Fill  the  order. 

Draw  a  draft  at  20  da.  from  date,  in  favor  of  your  j&rm,  indorse  it,  and  leave  it 
with  the  bank  for  collection. 

Make  the  proper  records  in  the  journal  and  the  bill  book. 


240  BOOKKEEPmG 

Pay  John  Sampson  cash,  for  carpenter  work  in  making  repairs  in  the 
store,  $7.50. 

Pay  Roby  Real  Estate  Co.  by  check,  for  rent  of  the  store  for  October, 

$300. 

Charge  the  Rent  account  in  the  cashbook. 

Pay  Wm.  Jennings  by  check,  for  keeping  and  feeding  horses,  |29. 
Receive  a  check  from  F.  W.  Earl  &  Co.,  Weedsport,  in  payment  of 
the  invoice  of  Oct.  1,  less  2%,  Form  61. 

Deposit  the  check  just  received.    Collection,  ^V  %• 
Make  out  a  daily  statement.    Post. 

Hand  all  books  to  the  instructor  for  approval. 

Saturday,  Oct.  6 

Your  team  has  delivered  the  goods  ordered  of  Walter  Baker  &  Co. 
on  Oct.  1,  Form  62. 

The  Enterprise  Carting  Co.  has  delivered  the  goods  ordered  of  Gray, 
Dunkle  &  Co.,  Chicago,  on  Oct.  1,  Form  63. 

Fred  O.  Wolven,  City,  telephones  for  the  following  goods : 

1  bbl.  0.  Crackers  1  bbl.  F.  G.  Sugar 
■                                             1  half  chest  F.  0.  Tea 

Because  of  some  special  dealing  with  Mr.  Wolven,  the  goods  are  furnished  to 
him  at  cost  prices.    Terms  :  on  account. 

Receive  a  New  York  draft  from  W.  D.  Greene,  Dansville,  in  payment 
of  the  bill  of  Oct.  2,  less  2%,  Form  64. 

Pay  salaries  for  the  week  in  cash  as  follows : 

Albert  B.  Curtis  $25. 

Edward  McDorman  10. 

F.  E.  Ramsey  10.50 

Receive  a  check  from  W.  D.  Packard  &  Co.,  City,  in  payment  of  the 
invoice  of  Sept.  29,  less  2%,  Form  65. 

The  following  orders,  which  were  received  in  this  morning's  mail,  are 
to  be  filled  in  the  regular  way.    Terms :  2/5,  net  30  da. 

1.  From  D.  L.  Hinman  &  Co.,  City : 

2  bags  P.  R.  Coffee  5  bbl.  S.  Pastry  Flour 
2  bales  G.  M.  Coffee                        5  bx.  C.  Codfish 

5  bbl.  0.  Crackers  5  bbl.  N.  0.  Molasses 

5  bbl.  C.  S.  Crackers  5  bbl.  P.  R.  Molasses. 


SET  VI.    WHOLESALE  GROCERY  241 

2.  From  James  K.  Lusk,  City : 

15  bbl.  0.  Crackers  6  bbl.  C.  S.  Crackers 

3  bbl.  St.  A  Sugar  6  bu.  N.  Y.  Medium  Beans 

1  bbl.  H.  W.  Starch  5  pkg.  S.  Yeast  Cakes 

3  half  chests  M.  Y.  H.  Tea 

3.  From  Salisbury,  Gray  &  Co.,  Rochester : 

8  bbl.  St.  A  Sugar  15  bbl.  C.  Soda  Crackers 

10  bbl.  Br.  C  Sugar 

Salisbury,  Gray  &  Co.  inclose  a  sight  draft  in  your  favor,  on  J.  E. 
Seel  &  Co.,  City,  for  $76.42,  to  apply  on  account.  Form  66. 

Write  a  letter  to  J.  E.  Seel  &  Co.,  inclosing  the  above  draft  to  apply 
on  account. 

Pay  for  postage,  etc.,  in  cash,  $7.50. 

The  acceptance  in  favor  of  Olney  P.  Davis  &  Co.  is  due  to-day,  pay- 
able at  The  Union  Bank. 

Issue  a  check  in  payment. 

Albert  B.  Curtis,  your  shipping  clerk,  has  made  application  for  a 
position  with  Perry,  Mason  &  Co.,  Boston.  The  position  with  that  firm 
promises  to  develop  an  excellent  future  for  Mr.  Curtis,  and  you  have 
decided  to  aid  him  in  securing  the  place.  Write  a  letter  of  recommen- 
dation for  Mr.  Curtis,  placing  a  high  estimate  on  his  integrity  and 
general  business  ability. 

SUGGESTIONS  BEARING  UPON  LETTERS  OF  RECOMMENDATION 

1.  Avoid  exaggerated  expressions.    They  injure  the  one  recommended. 

2.  Be  thoroughly  acquainted  with  the  qualities  of  which  you  speak. 

3.  Recommend  only  those  who  are  worthy  of  some  praise. 

4.  Be  sincere ;  do  not  entirely  pass  over  defects  when  you  know  that  they  exist. 

5.  Generally  speaking,  do  not  write  a  letter  of  recommendation  addressed,  To 
whom  it  may  concern,  as  such  a  letter  cannot  give  a  specific  commendation. 

6.  Aim  to  be  original  in  your  expressions. 

7.  A  good  letter  of  recommendation  usually  conforms  with  the  following  arrange- 
ment of  thoughts : 

Paragraph  No.  1 :  Introduction. 

Paragraph  No.  2  :  General  estimate  of  character  and  ability. 

Paragraph  No.  3  :  Brief  summary  and  courteous  closing. 

Give  Geo.  H.  Dobbin  a  check,  for  private  use,  |25. 
Student  withdraws  by  check,  from  the  busmess  for  private  use,  |50. 
Deposit  the  check,  the  New  York  draft,   the  sight  draft  on  R.  D. 
Fowler  &  Co.,  and  all  the  currency  on  hand. 


242  BOOKKEEPING 

Make  out  a  daily  statement  and  have  it  examined.    Post. 
Proceed  to  adjust  the  interest  on  the  Proprietors'  accounts,  preparatory 
to  making  the  statements  and  closing  the  general  ledger. 

HOW  TO  ADJUST  INTEREST  BETWEEN  PARTNERS 

1.  The  investments  were  all  paid  on  Sept.  15.  Determine  the  exact  number  of 
days  from  that  date  to  Oct.  6.    Find  the  interest  on  each  investment  for  this  time. 

2.  The  private  accounts  were  credited  for  salaries  Sept.  29.  Determine  the  exact 
number  of  days  from  that  date  to  Oct.  6.  Find  the  interest  on  each  private  account 
credit  for  this  time. 

3.  Find  the  total  interest  due  the  partners. 

4.  Find  the  interest  on  each  man's  withdrawals  from  the  time  of  such  with- 
drawals to  Oct.  6. 

5.  Find  the  total  interest  due  the  business  from  the  withdrawals  of  the  partners. 

6.  Find  the  difference  between  the  two  totals  above.  This  sum  is  the  net  interest 
due  the  partners  from  the  business. 

7.  Next,  find  the  difference  between  the  total  interest  due  each  and  the  total 
interest  to  be  charged  to  each.  These  sums  represent  the  amounts  to  be  credited  to 
each  partner  and  debited  to  Interest  account.  This  interest  does  not  properly  belong 
to  the  regular  Interest  account,  since  that  account  is  intended  solely  for  interest 
arising  from  transactions  with  others. 

HOW  INTEREST  DUE  ON  THE  PROPRIETORS'  ACCOUNTS  MAY  BE  KEPT 
OUT  OF  THE  REGULAR  INTEREST  ACCOUNT 

In  this  set  gains  and  losses  are  to  be  shared  equally ;  therefore  one  third  of  any 
sum  placed  in  the  Interest  account  will  finally  be  transferred  to  the  opposite  of  the 
proprietors'  accounts  when  the  proper  shares  of  profits  or  losses  are  carried  to  these 
accounts.  For  example  :  Suppose  the  total  interest  due  the  partners  is  $60.  Of  this 
sum  there  is  due  A  $17,  B  $21,  and  C  $22.  If  this  was  entered  on  the  books  it 
would  appear  as  follows  : 

Interest  $60 

A  $17 

B  21 

C  22 

If  the  $60  interest  was  to  be  closed  to  Loss  and  Gain  and  then  distributed  to  the 
partners  as  a  cost  to  the  business,  each  partner's  gain  would  be  decreased  $20,  or 
his  loss  increased  $20.    Then  we  should  have  : 

1.  A's  debit  is  $20,  and  his  credit  $17.    He  owes  the  business  $3. 

2.  B's  debit  is  $20,  and  his  credit  $21.    The  business  owes  him  $1. 

3.  C's  debit  is  $20,  and  his  credit  $22.    The  business  owes  him  $2. 

Instead  of  this,  one  entry  will  adjust  the  interest  between  partners,  as  follows : 

A  $3 

B  $1 

C  2 


SET  VI.  WHOLESALE  GROCERY  243 

On  this  basis  of  reasoning,  make  the  proper  entry  to  adjust  the  interest 
on  the  proprietors'  accounts  in  the  business. 

Have  the  entry  approved  before  posting  it  to  the  ledger. 


Closing  the  Work  for  October 

1.  Close  the  cashbook.    Proceed  carefully  and  study  the  model  cash- 
book.    Post  the  summary  of  the  cashbook. 

2.  Rule  and  foot  the  sales  book  and  make  the  proper  entry.    Post 
the  entry. 

3.  Rule  and  foot  the  journal  and  make  the  proper  entry.    Post  the 
entry. 

4.  Rule  and  foot  the  invoice  book  and  make  the  proper  entry.    Post 
the  entry. 

5.  Prove  the  sales  ledger.    (See  model,  page  229.) 

6.  Prove  the  purchase  ledger.    (See  model,  page  229.) 

7.  Have  your  abstracts  approved  by  the  instructor. 

8.  Make  a  trial  balance  from  the  general  ledger  and  have  it  approved. 

9.  The  following  is  a  statement  of  the  inventories. 

Inventories.  October  6,  19 — 

Merchandise  (Resource) : 

Per  schedule  on  file  $24057.59 


Merchandise  (Liability) : 

Due  Enterprise  Carting  Co.  for  freight 

and  cartage  to  date 

$339.45 

Horse  and  Wagon : 

Cost 

$525. 

Depreciation 

5.25 

$519.75 

Rent: 

Due  for  subrentals 

■*15. 

Unexpired  rent 

225. 

$240. 

Insurance : 

Unexpired  premiimi 

$195. 

Office  fixtures : 

Cost 

$1920. 

Depreciation 

192. 

$1728. 

244 


BOOKKEEPING 


Expense  (Resource) : 

2  tons  Coal 

*9. 

Stationery,  etc. 

6.50 

$15.50 

Expense  (Liability) : 

Unpaid  gas  bill 

*15.69 

Due  proprietors  on 

salary 

68.75 

Due  traveling  salesmen  on 

salary 

31.50 

Due  Bell  Telephone 

5  Co. 

9.50 

$125.44 

10.  Make  a  statement  of  losses  and  gains  and  have  it  approved. 
The  following  is  suggestive  of  the  form  for  the  statement  of  losses 
and  gains  in  this  set. 


Statement  of  Losses  and  Gains,  October  6,  19 — 


Mdse.  bought  of  A.  J.  Weaver  &  Co, 

Mdse.,  regular  purchases  to  Oct.  6 

Freight  and  drayage  paid  to  date                    120. 

Freight  and  drayage  due  to  date,  per  inv.        390. 

Mdse.  sales  to  date 

Mdse.  on  hand,  per  inv. 

Gain  on  Mdse.,  carried  down 

Gain  on  Mdse.,  brought  down 
Expense,  total  per  ledger                                  790. 
Expense,  unpaid  items,  per  inv.                      340. 
Expense,  total  outlay                                      1130. 
Expense,  less  items  on  hand,  per  inv.             120. 

14500 
21.500 

510 
4860 

90 
10 

24170 
17200 

90 
10 

41371 

41371 

1010 

270 

10 

50 
17 

120 

15 
160 

3207 

50 
50 

10 

4860 

10 

Mdse.  Disc,  on  purchases                                  120. 
Mdse.  Disc,  on  sales                                          390. 

Interest  allowed  to  us                                           10. 
Interest  allowed  by  us                                         20.50 

Insurance,  paid  premium                                  340. 
Insurance,  unexpired  premium                         290. 

Coll.  and  Exch.,  total  outlay 

Rent,  paid  to  date                                             420. 

Rent,  unexpired                                     250 

Rent,  due  for  subrentals                         50       300. 

Depreciation 

a.  Horse  and  Wagon,  on  account  of  use 

b.  Office  Fixtures,  on  account  of  use 
Net  gain  of  the  firm 

4860 

10 

4860 

10 

11.  Make  a  statement  of  resources  and  liabilities  and  have  it  approved. 
The  following  is  suggestive  of  the  form  for  the  statement  of  resources 
and  liabilities  in  this  set. 


SET  VI.  WHOLESALE  GROCERY 


245 


Statement  of  Resources  and  Liabilities,  October  6,  19- 


Cash  iu  bank 

Properties  classified  as  follows  : 

Good  Will,  estimated  value 

Mdse.,  per  inv. 

Mdse.,  unpaid  freight  and  cartage 

Horse  and  Wagon,  cost 

Horse  and  Wagon,  depreciation 

Office  Fixtures,  cost 

Office  Fixtures,  depreciation 
Expense,  unpaid  items,  per  iuv. 
Expense,  per  inv. 
Insurance,  unexpired  premium 
Rent,  unexpired 
Rent,  due  from  subrentals 
Accts.  Receivable,  per  sales  ledger 
Bills  Receivable 

Accts.  Payable,  per  purchase  ledger 
Bills  Payable 

Total  resources 

Total  liabilities 
Edw.  S.  Rose,  Priv.  Acct. 
H.  A.  Lester,  Priv.  Acct. 
Benj.  F.  Custer,  Priv.  Acct. 
Capital  of  the  firm 
Net  gain  of  the  firm 


17200.10 
390. 


555. 
•15. 


1960. 
160. 


340. 
120. 


250. 
50. 


4357 

2000 

16810 

540 

1800 

290 

300 

7200 

200 


33497 
100 


33597 


10 


10 


10 


220 


9020 
750 


9990 

138 

261 

20000 

S207 


33597 


12.  Make  a  statement  proof  and  have  it  approved. 

13.  Close  the  general  ledger.  Distribute  the  net  gain  or  the  net  loss 
to  the  partners'  private  accounts. 

The  firm  account  should  not  be  closed. 

Bring  down  all  inventories  below  the  rulings  under  Oct.  8. 

14.  Prove  the  bill  book. 

15.  Close  all  accounts  in  the  sales  ledger  and  the  purchase  ledger 
which  balance. 

16.  Hand  in  all  books  for  examination  and  approval. 

This  set  will  now  be  discontinued  to  afford  the  student  additional  practice  along 
somewhat  different  lines  of  work. 

Draw  a  check  in  favor  of  the  instructor  for  the  amount  to  the  credit 
of  your  firm  in  The  Union  Bank,  and  hand  it  in.  Also  hand  in  everything 
in  the  Personal  Cash  envelope. 

Remember  the  monthly  statement  of  your  bank  account. 


246  BOOKKEEPING 

EXERCISE  61 
A  Writtex  Review 

The  following  review  exercise  is  suggested : 

The  following  is  the  trial  balance  of  an  msolvent  business  in  which 
the  proprietors  have  equal  investments : 

John  H.  Reader,  Prop.  $1250 

H.  J.  Cuiiy,  Prop.  1250 

Cash  $880.20 

Merchandise  3350, 

Accounts  Receivable  2404. 

Bills  Receivable  2065.80 

Furniture  and  Fixtures  850. 

Expense  2062.90 

Interest  26.10 

Accounts  Payable  7400 

Bills  Payable  1739 

$11639.  $11639 

The  following  is  a  summary  of  the  resource  and  liability  inventories ; 


Furniture  and  Fixtures,  > 

on  hand 

$875. 

Expense,  items  on  hand 

167.25 

Unpaid  telephone  bill 

21.70 

Merchandise,  on  hand 

1500. 

Unpaid  freight  bill 

67.25 

Interest  accrued  on  Bills 

Pay. 

5.60 

Interest  accrued  on  Bills  Rec. 

7.80 

a.  Make  the  usual  statements  and  the  proof. 

b.  What  will  the  business  pay  on  the  dollar,  that  is,  what  per  cent  ? 

EXERCISE  62 

SET  H.   CARPETS 

Directions.  Record  the  following  transactions  in  the  journal,  the  cash- 
book,  the  sales  book,  and  the  purchase  book ;  post  to  one  ledger ;  take  a 
trial  balance ;  make  the  two  statements,  using  the  forms  given  in  Set  VI ; 
close  the  ledger ;  take  a  trial  balance  after  closing. 

The  mvestments  of  the  partners  are  equal,  and  the  losses  or  the  gains 
are  to  be  shared  equally.    The  firm  name  is  to  be  Student  &  Fox. 

Use  loose  sheets  of  journal  paper  and  ledger  paper  for  recordmg  the 
transactions.    Do  not  use  special  columns  in  the  cashbook  or  the  journal. 

Note.   This  set  is  to  be  finished  without  assistance  from  the  instructor. 


A  WRITTEN  REVIEW  247 

May  1.  Student  and  Henry  I.  Fox  begin  the  Carpet  business  with  the 
following  resources  and  liabilities : 

Cash  on  hand,  $1000 

Cash  on  deposit  in  The  Union  Bank,  $750 

A.  K.  Johnson's  note,  $240 

Interest  accrued  on  the  above  note,  $10 

The  following  owe  them  on  account : 

Reader  &  Co.,  $350 

Ray  S.  Baker,  $525 

0.  H.  Barker,  $225 
A  note  in  favor  of  John  F.  Carrier,  $485.50 
Interest  accrued  on  the  above  note,  $14.50. 

2.  Buy  of  Howard  S.  Crane,  on  account,  2%  10  da. : 

300  yd.  Moquette  at  $1.25  250  yd.  Brussels  at  $1.10 

400  yd.  Ingrain  at  58^ 

2.  Sell  Donald  &  Son,  for  cash : 

100  yd.  Moquette  at  $1.50  50  yd.  Ingrain  at  80^ 

Receive  their  check  for  the  amount  of  the  bill. 

4.  Give  A.  G.  Curry  a  check  for  $35.50,  for  office  books  and  supplies. 

5.  Draw  a  sight  draft  on  Reader  &  Co.,  ui  your  own  favor,  for  $250, 
and  leave  it  at  the  bank  for  collection. 

6.  Receive  of  Ray  S.  Baker  his  note  at  10  da.,  with  interest,  for  $200. 

8.  Sell  Frank  S.  Brady  on  account : 

100  yd.  Brussels  at  $1.35  100  yd.  Ingrain  at  80^ 

9.  Buy  of  David  S.  Wells  on  account : 

500  yd.  Matting  at  47(^ 

10.  Pay  Howard  S.  Crane  by  check,  for  the  invoice  of  May  2,  less  2% 

11.  Sell  Wm.  H.  Garland  on  account,  1%  10  da.: 

150  yd.  Matting  at  60^  100  yd.  Ingrain  at  78^ 

12.  Your  bank  reports  the  collection  of  the  draft  left  on  May  5. 
Collection,  J^^^. 

12.  Buy  an  office  safe  of  the  Howard  Safe  Co.  for  $90.  Give  them 
your  sight  draft  on  Ray  S.  Baker  for  the  amount  of  the  bill. 

13.  Receive  of  Reader  &  Co.  their  note  at  30  da.  for  $100. 

15.  Give  David  S.  Wells  your  sight  draft  on  Ray  S.  Baker  for  the 
invoice  of  May  9. 

15.  Receive  of  Frank  S.  Brady  a  sight  draft  on  Meeker  &  Co.  for  $100, 
and  his  check  for  $115,  for  the  invoice  of  May  8, 


248  .  BOOKKEEPING 

May  16.  Receive  of  Ray  S.  Baker  a  New  York  exchange  for  his  note 
and  the  interest,  due  to-day. 

17.  Sell  Ford  &  Co.  on  account,  1%  10  da. : 

100  yd.  Moquette  at  $1.50  100  yd.  Matting  at  60<^ 

18.  Give  each  partner  a  check,  for  personal  use,  |50. 

19.  Receive  of  Wm.  H.  Garland  his  check  for  the  invoice  of  May  11, 
less  1%. 

20.  Receive  of  A.  K.  Johnson  cash,  for  his  note  and  the  interest,  due 
to-day.    Face  of  the  note,  $240 ;  interest,  $10.75. 

23.  Draw  a  sight  draft  on  O.  H.  Barker,  in  your  own  favor,  for  $225, 
and  leave  it  at  the  bank  for  collection. 

24.  Buy  of  Howard  S.  Crane  on  account,  2%  10  da.: 

100  yd.  Moquette  at  $1.25  100  yd.  Brussels  at  $1.10 

25.  Give  John  F.  Carrier  your  check  for  your  note  and  the  interest, 
due  to-day.    Face  of  the  note,  $485.50  ;  interest,  $16.45. 

25.  Sell  Frank  S.  Brady  on  account : 

50  yd.  Moquette  at  $1.50  50  yd.  Brussels  at  $1.35 

100  yd.  Matting  at  60<^ 

26.  Sell  Wm.  H.  Garland  on  account,  1%  10  da.: 

50  yd.  Moquette  at  $1.55  100  yd.  Brussels  at  $1.35 

26.  Receive  of  Ford  &  Co.  their  sight  draft  on  Henry  F.  Grady  for 
the  invoice  of  May  17,  less  1%. 

27.  Sell  Ford  &  Co.  on  account,  1%  10  da. : 

100  yd.  Matting  at  60^ 

29.  Your  bank  reports  the  collection  of  the  draft  left  on  May  23. 
Collection,  ^-^^0- 

30.  Buy  of  Henry  W.  Elson  on  account : 

100  yd.  Matting  at  47^ 

31.  Give  Harry  S.  Carmen  a  check  for  his  monthly  salary,  $30. 

Inventories,  May  31,  19 — 
Merchandise : 

100  yd.  Moquette  at  $1.25  150  yd.  Ingrain  at  58^ 

100  yd.  Brussels  at  $1.10  150  yd.  Matting  at  48^ 

Expense : 

Office  Books  and  Stationery,  $30 
Office  Safe  at  cost,  less  %10. 


PART  III.    ADVANCED  WORK 


SET  VII.   DRY-GOODS  BUSINESS 

The  Object  of  this  set  is  to  illustrate,  as  concisely  as  possible,  a  system 
of  bookkeeping  which,  with  slight  modifications,  may  be  adapted  to  the 
general  routine  of  a  wholesale  or  a  jobbing  dry-goods  house.  No  at- 
tempt is  made  to  enter  into  an  explanation  of  the  minor  details  of 
bookkeeping,  which  are  different  in  all  large  dry-goods  houses. 

Some  of  the  special  features  of  this  set  are : 

1.  Suggestions  bearing  upon  general  business  correspondence. 

2.  The  introduction  and  the  use  of  the  Cash  Suspense  account,  and  the 
significance  of  Protest  as  applied  to  commercial  paper. 

3.  A  more  complete  explanation  and  illustration  of  special  columns. 

4.  The  use  of  the  Power  of  Attorney. 

5.  A  personal  account  closed  into  the  Loss  and  Gain  account. 

6.  A  classification  of  the  Merchandise  account. 

7.  An  illustration  of  goods  returned,  both  a  purchase  and  a  sale. 

The  following  books  are  used :  the  cashbook,  the  sales  book,  the  in- 
voice book,  the  journal,  the  general  ledger,  the  sales  ledger,  the  purchase 
ledger,  and  the  bill  book. 

The  cashbook  used  in  this  set  is  essentially  the  same  as  the  one  explained  and 
illustrated  in  Set  VI,  but  several  new  special  columns  have  been  added. 

The  Bills  Receivable  column  on  the  left  side  of  the  cashbook  is  for 
the  cash  received  for  notes  and  acceptances  paid  or  discounted.  Only 
the  total  of  this  column  is  posted.  Such  a  column  may  be  used  when 
a  large  number  of  notes  are  received  on  account. 

The  Bills  Payable  column  on  the  right  side  of  the  cashbook  is  for  the 
cash  paid  for  our  notes  and  acceptances.  Only  the  total  of  this  column 
is  posted.  Such  a  column  may  be  used  when  our  notes  and  accept- 
ances are  given  frequently  on  account. 

Owing  to  the  introduction  of  the  classified  Merchandise  account,  the 
totals  of  the  Merchandise  Discount  columns,  in  the  cashbook,  are  closed 
under  the  names  Merchandise  Sales  and  Merchandise  Purchases^  and 
posted  to  the  ledger  accounts  bearing  these  names. 

Make  a  careful  study  of  the  cashbook  illustrated  on  pages  250  and  251. 

249 


250 


BOOKKEEPING 


Cash  Receipts,  November,  19- 


ACCTS.  RECEIVABLE 

DATE 

F 

ACCOUNT  CREDITED 

EXPLANATION 

BILLS 

DISC. 

RECEIVABLE 

DR. 

NET  CASH 

Nov. 

19 

Balance 

In  bank 

5000 

20 

21 

F.  Cole 

In  full,  less  3% 

100 

90 

3262 

57 

24 

16 

J.  H.  Miner 

On  account 

900 

26 

\/ 

Bills  Rec. 

J.  Miner's  note 

900 

26 

6 

Interest 

On  above 

50 

27 

17 

C.  B.  Gray 

Inv.  11/16,  2% 

20 

980 

28 

v/ 

Bills  Rec. 

Daniel's  note 

500 

28 

s/ 

Bills  Rec. 

Osborn's  note 

250 

29 

18 

Green  &  Co. 

On  account 

1210 

29 

19 

D.  M.  Snow 

Inv.  11/14,  2% 

10 

490 

30 

\/ 

Bills  Rec. 

M.  D.  Cobb's  note 

600 

30 

4 

Mdse.  Sales,  Dr. 

Total  discount  on  sales 

130 

m 

30 
30 

8 

8 

To  Accts.  Rec. 
Accts.  Rec. 

Receipts 

130 

JO 

6842 

6842 

57 

57 

30 

6 

Bills  Rec. 

Total  paid 

■ 

2250 

2250 

/ 

1 

14142 

~E- 

Special  Columns  in  Sales  Book  and  Invoice  Book.  The  sales  book  used 
in  many  wholesale  and  jobbing  dry-goods  houses  is  provided  with  special 
columns  for  the  several  departments  of  the  business.  These  columns  are 
indispensable  when  a  special  Merchandise  account  is  used  for  each  depart- 
ment. When  these  departmental  accounts  are  kept,  the  invoice  book 
should  be  provided  with  special  columns  for  the  several  departments. 


Note.  When  accounts  with  the  several  departments  of  a  business  are  kept,  they  are 
debited  with  their  approximate  share  of  the  general  expenses  of  the  concern.  This,  in 
most  cases,  means  an  additional  number  of  special  columns  in  the  cashbook.  The  inven- 
tories belonging  to  each  department  will  then  be  recorded  separately,  and  the  several 
departmental  accounts  closed  separately  into  a  general  Merchandise  account ;  or  directly 
into  the  Loss  and  Gain  account,  if  there  are  no  goods  kept  in  stock  except  those  covered 
by  the  different  departments. 


SET  VII.   DRY  GOODS 


251 


Cash  Payments 

,N 

ovem 

ber, 

19 

F 

ACCOUNT 
DEBITED 

EXPLANATION 

ACCTS. 

PAYABLE 

EXPENSE 

COLL. 
AND 
EXCH. 

BILLS 
PAYABLE 

GENERAL 

DATE 

DISC. 
CR. 

NET  CASH 

1 

Nov. 

18 
19 
20 
21 
22 
23 
23 
24 
24 
24 
25 
25 
23 
28 
29 
29 
30 
30 
30 
30 
30 
30 
30 

s/ 

31 

30 

5 

2 

v' 

\f 
6 
29 

6 

V 

32 
34 

y/ 
4 
2 
4 
8 

Expense          Stamps 
Expeuse          Coal  bill 
Mason  &  Co.  Inv.  11/16,  2% 
Ely  &  Co.        Inv.  11/19,  2% 
Salary            For  week 
Trav.  Exp.      W.  Conway 
Coll.  and  Ex.  On  checks 
Bills  Pay.       Favor  S.  Lake 
Bills  Pay.       Favor  H.  May 
Interest          On  above 
iMay  &  Co.      Inv.  11/18,  4% 
Coll.  and  Ex.  On  above 
Interest          Daniel's  note 
Bills  Pay.       Favor  D.  Keys 
Expense          Gas  bill 
W.K.Gay      Private  use 
Low  &  Co.      On  account 
Henry  &  Co.  On  account 
Coll.  and  Ex.  On  checks 
Accts.  Pay.    Total  disc,  on 
To  Mdse.  Purchases       Cr. 
Accts.  Pay.    Payments 
Expense          Total 

40 
38 

60 

138 
138 

1960 
1862 

1440 

220 
200 

10 
9 

17 

50 
50 

4 
1 

92 
75 

20 

1200 
200 

500 

140 
200 

10 

14 

100 

5682 
37 

10 

5682 

37 

30 
30 

30 

7 
3 

Coll.  and  Ex.  Total 
Bills  Pay.       Total  paid 
Balance          In  Bank 



6 

87 



6 
1900 
6052 

87 

1900 

60 

14142 

57 

Incoming  Business  Forms  for  November 

The  student  is  requested  to  read  the  instructions  given  on  page  209, 
preceding  the  hst  of  business  forms  for  September.  The  instructions 
there  given  apply  to  the  work  for  Set  VII.  A  tablet  of  business  forms 
containing  all  the  incoming  papers  is  prepared  for  Set  VII,  if  business 
practice  is  used.    If  the  tablet  is  not  used,  prepare  the  following  forms : 

Form  1.  Power  of  attorney  by  which  A.  J.  Morley  &  Co.  confer  upon 
you  the  right  to  sign  and  indorse  their  notes,  checks,  other 
negotiable  paper,  etc. 
Use  legal  cap  paper.    (See  Form  VI,  Appendix  F.) 


252 


BOOKKEEPING 


Price  List  for  November  and  December 


American  Black  Dress  Silk 

Amazon  Cloth 

Barjeon  Cashmere      .     .     . 
Black  English  Camel's  Hair 
Black  Wool  Lansdowne 
Black  Wool  Cr^pon    .     .     . 

Bengaline  Silk 

Bone  Buttons 

Boys'  Heavy  Cotton  Hose  . 
Black  Chantilly  Lace      .     . 

Corticelli  Silk 

Cotton  Surah  Lining      .     . 

Duchesse  Lace 

Feather  Ticking  .... 
Fancy  Wool  Cheviot  .  . 
Fine  English  Serge  .  .  . 
Fancy  Plaids,  all  wool  .  . 
Fancy  Boucle  Stripe  .  .  . 
Fancy  Black  Ribbon  .  .  . 
Fancy  Gingham     .... 

Gilt  Buttons 

Gunner's  Duck 

Grosgrain  Ribbon  .... 

Jet  Buttons  ...... 

Ladies'  Cashmere  Hose  .  . 
Linen  Torchon  Lace  .  .  . 
Ladies'  Kid  Gloves  .  .  . 
Men's  Kid  Gloves  .... 

Marquise  Lace 

Men's  Balbriggan  Half  Hose 
Percale  Shirting    .... 

Scotch  Cheviot 

Striped  Denim  .... 
Simpson  Mourning  Print     . 

Taffeta  Silk 

Thompson  Thread  .  .  . 
Venetian  Crape  Cloth     .     . 

Velvet  Ribbon 

Wash  Silk 

Wamsutta  Cotton  .  .  . 
Whalebones 


QUANTITY 


yd. 


gro. 

doz. 

pc. 

doz.  spools 

yd. 

pc. 

yd. 


pc. 

yd. 

gro. 

yd. 

pc. 
gro. 
doz. 
doz.  pc. 
doz. 


pc. 
doz. 


yd. 


doz.  spools 

yd. 

pc. 

yd. 

doz. 


^1.00 
.98 
1.12^ 
1.50 
.52 
1.50 
.85 
.11 
1.00 
.66| 
.87^ 
.50 
2.25 

.05^ 

1.12^ 

1.37^ 

.32 

.12^ 

2.75 

.061 
1.87^ 
.14 
1.12^ 
2.40 
2.75 
.86 
7.50 
7.00 
1.75 
5.50 
.07^ 
.37^ 
.08 
.05^ 
.87^ 
.43 
•    .871 
2.121 
.31 
.31 
.95 


SELLING  PRICE 


$1.25 
1.25 
1.37^ 
1.87^ 

.68 
2.00 
1.10 

.14 
1.25 

.90 
1.05 

.62 
3.00 

.08 
1.35 
1.55 

.41 

.15 
3.50 

.08 
2.25 

.17^ 
1.50 
3.00 
3.50 
1.10 
9.50 
9.00 
2.20 
0.87^ 

.09^ 

.50 

.09^ 

.07 
1.00 

.50 
1.00 
2.871 

.39 

.39 
1.27 


SET  VII.   DRY  GOODS 


253 


POWER  OF  ATTORNEY  DEFINED 

A  power  of  attorney  is  a  written  instrument  by  which  one  person  appoints  another 
to  act  for  him  along  certain  specified  lines.  It  is  frequently  drawn  up  under  seal ; 
indeed,  when  the  authority  conferred  is  to  execute  any  instrument  that  must  be 
recorded,  the  person  signing  the  paper  must  go  before  a  notary  public  or  a  similar 
officer  and  acknowledge  that  he,  of  his  own  free  act  and  will,  executed  the  same. 

Form  2.  Cash  check  for  $4834.44,  dated  City,  Nov.  19,  drawn  by  A.  J. 

Morley  &  Co.  on  Traders  National  Bank. 
Form  3.  Note  of  Green  &  Gregory,  dated  Clyde,  Nov.  19,  drawn  at  3  mo., 

in  favor  of  your  firm,  A.  J.  Morley  &  Co.,  for  $188.44,  payable 

at  Briggs  National  Bank,  Clyde. 
Form  4.  Invoice  of  Jordan,  Marsh  &  Co.,  Boston,  dated  Nov.  19.    Terms : 

10-day  draft,  $500  ;  balance  60  da.  net.    Items  as  follows : 

10  pc.  (521,  40,  43,  45,  42,  47|,  46,  48,  49i,  50)  Fancy  Gingham 
10  pc.  (441,  45,  46,  53,  41^,  47,  52,  48,  511,  50)  Fancy  Boucle  Stripe    - 
10  pc.  (52,  41,  50,  49,  50,  56,  45,  53,  47,  50)  Fancy  Plaids,  all  wool 
10  pc.  (52,  47,  421,  45,  48,  491,  47,  56,  52,  58)  Fine  English  Serge 
150  doz.  Boys'  Heavy  Cotton  Hose 
50  gro.  Gilt  Buttons 
75  pc.  Duchesse  Lace 

The  figures  in  parenthesis  above  indicate  the  number  of  yards  in  each  piece. 
Observe  the  following  form  for  such  invoices. 

Follow  this  arrangement  for  all  the  invoicing  in  this  set.  41^  is  equal  to  41^, 
45^  is  equal  to  45|.  Fractions  having  a  denominator  other  than  2  or  4  are  written 
out  in  full.    In  finding  the  total  number  of  yards  in  any  number  of  pieces,  do  not 


Mew  York,. 


^ 


C-rp-r^  ^C^, 


.I9j=l 


>^^^^. 


Bough  of  SIEGEL,  COOPER  ^  CO. 

Terms :  ^//n,r^^^/'«(^  r/^^ 


-<i^'g^. -^^  "g^^-g^^-Z^^   ^^'     <^/7^ 


JLl ^<^7A 


^cr^_=z 


2^r<p 


ZJ.. 


-gZ^i^.. 


'^^r:f^yL/L-'/>-rp-^  ^^^ 


f<^f 


2=2. 


£a 


2^1 


':^^:^.''-^  ^^ 


y^ 


/7>/: 


nA 


j:^ 


254  BOOKKEEPING 

copy  the  various  items  on  another  sheet,  but  add  them  horizontally  as  they  stand. 
Add  the  fractions  first  and  reduce  them  to  their  simplest  form ;  then  add  the  integers 
and  write  the  sum  on  the  bill  in  the  manner  shown  in  the  illustration. 

Note.    Your  firm's  name  is  A.  J.  Morley  &  Co. 

Form  5.  Draft  of  Jordan,  Marsh  &  Co.,  Boston,  dated  Nov.  19,  drawn  on 
your  firm,  in  favor  of  themselves,  at  10  days'  sight,  for  $500. 

Form  6.  Draft  of  Traders  National  Bank,  Batavia,  on  Chemical  National 
Bank,  New  York,  dated  Nov.  19,  drawn  in  favor  of  F.  M. 
Reed  &  Co.,  and  transferred  by  them  to  your  firm  by  full 
indorsement,  for  1 3 26 2. 5 7,  W.  D.  Fain,  Cashier. 

Form  7.  Invoice  of  R.  W.  White  &  Co.,  New  York,  dated  Nov.  19. 
Terms:   3/15,  net  30  da.    Items  as  follows: 

10  pc.  (45,  52,  41,  50,  56,  62,  61,  50,  52,  58)  Am.  B.  D.  Silk 
10  pc.  (42,  45,  52,  58,  61,  64,  52,  49,  51,  50)  Barj eon  Cashmere 
10  pc.  (45,  52,  61i,  64|,  62,  50,  50f,  54,  51,  57)  B.  E.  Camel's  Hair 
100  doz.  spools  Corticelli  Silk 

5  pc.  (52,  41,  40,  47,  56)  Feather  Ticking 
50  pc.  Marquise  Lace 

10  pc.  (421,  42,  47,  62,  56,  50,  58,  52,  57^,  54)  Striped  Denim 
20  doz.  Men's  Balbriggan  Half  Hose 

Form  8.  Draft  of  F.  R.  Stearns  &  Co.,  Boston,  dated  Nov.  20,  drawn  on 
your  firm,  in  favor  of  themselves,  at  4  days'  sight,  for  |630. 

Form  9.  Bill  of  F.  M.  Upton  &  Co.,  City,  dated  Nov.  21,  for  6  T.  coal 
at  $5.25.    Terms:  cash. 

Bill  is  receipted  by  C.  O.  M.  for  F.  M.  Upton  &  Co. 

Form  10.  Invoice  of  the  Ellsworth  Mills,  Detroit,  dated  Nov.  19.  Terms: 
3/10,  1/30,  net  60  da.    Items  as  follows : 

25  doz.  Ladies'  Cashmere  Hose 

10  pc.  (52|,  51,  46,  42,  57,  52i,  56,  58,  57^,  59)  V.  C.  Cloth 

6  pc.  (52,  41,  52,  48,  52,  51i)  Wash  Silk 

10  pc.  (42,  41,  46,  50,  49,  48,  49,  52,  47,  45)  Taffeta  Silk 

Form  11.  Check  of  Knowlton  &  Beach,  Rome,  dated  Nov.  20,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $275. 

Form  12.  Bill  of  Fisher  Bros.,  Tonawanda,  dated  Nov.  20,  for  1  mahogany 
roll-top  office  desk,  fl25.    Terms:  cash. 

Form  13.  Invoice  of  Freeman  Glove  Co.,  City,  dated  Nov.  21.  Terms : 
2/20,  net  30  da.    Items  as  follows : 

75  doz.  Men's  Kid  Gloves  75  doz.  Ladies'  Kid  Gloves 


SET  VIL   DRY  GOODS  255 

Form  14.  Sight  draft  of  C.  D.  Washburn,  Bedford,  drawn  on  Freeman 

Glove  Co.,  City,  Nov.  20,  in  favor  of  your  firm,  for  |56.25. 
Form  15.  Check  of  Gardiner  &  Sprong,  Rush,  dated  Nov.  21,  drawn  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  $300. 
Form  16.  Sight  draft  of  Fred  S.  Goodwin,  Savannah,  dated  Nov.  21,  drawn 

on  Geo.  R.  Tillison,  City,  in  favor  of  your  firm,  for  |250. 
Form  17.  Invoice  of  Ellis  Mfg.  Coi,  Springfield,  dated  Nov.  21.    Terms : 

3/10,  net  30  da.    Items  as  follows : 

50  gro.  Bone  Buttons  100  gro.  Gilt  Buttons 

100  gro.  Jet  Buttons 

Form  18.  Receipted  bill  of  Citizens  Carting  Co.,  City,  dated  Nov.  23. 
Terms :  cash.    Items  as  follows : 

Nov.  19,  Cartage,  $4.75 ;  Freight,  |69.54 

20,  Cartage,    1.00 ;  Freight,    24.50 

21,  Cartage,    3.50 ;  Freight,    62.50 

22,  Cartage,    3.75 

Form  19.  Note  of  B.  N.  Acker,  Byron,  dated  Nov.  21,  drawn  at  30  da., 

with  interest  at  6%,  in  favor  of  your  firm,  payable  at  Alliance 

Bank  of  Byron,  for  flOOO. 
Form  20.  Draft  of  J.  V.  Richardson  &  Co.,  Earlville,  dated  Nov.  22,  on 

H.  A.  McDowell  &  Co.,  City,  in  favor  of  your  firm,  drawn 

at  10  da.  from  date,  for  |150. 
Form  21.  Check  of  John  B.  Howard  &  Co.,  City,  dated  Nov.  22,  drawn 

on   Traders    National    Bank,    in   favor   of    your   firm,    for 

1600.47. 
Form  22.  Invoice  of  C.  O.  Bond  &  Co.,  Philadelphia,  dated  Nov.  22. 

Terms:  10-day  draft  for  |250;  balance  in  30  da.,  less  2%. 

Items  as  follows : 

10  pc.  (521-,  50,  52,  56,  42,  48,  53f ,  54,  56,  50)  Gunner's  Duck 
10  pc.  (47,  45^,  47^,  46,  54,  56,  62,  50,  54,  51)  S.  M.  Print 

5  pc.  (471,  41,  48,  46^,  49)  Scotch  Cheviot 
25  pc.  Duchesse  Lace 
10  pc.  (49,  42,  52,  47,  41,  46,  40,  54,  62,  60)  B.  E.  Camel's  Hair 

Form  23.  Draft  of  C.  O.  Bond  &  Co.,  Philadelphia,  dated  Nov.  22,  drawn 
in  their  own  favor  at  10  da.  from  date,  on  your  firm,  for  |250. 

Form  24.  Check  of  C.  D.  Washburn,  Bedford,  dated  Nov.  22,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  |605.19. 

Form  25.  Check  of  Knowlton  &  Beach,  Rome,  dated  Nov.  23,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $1200. 


256  BOOKKEEPING 

Form  26.  Sight  draft  of  Houghton,  Button  &  Co.,  Chicago,  dated  Nov.  22, 
drawn  on  your  firm,  in  favor  of  themselves,  for  $750,  and 
indorsed  by  them  to  Merchants  Bank,  Chicago.  Transferred 
by  Merchants  Bank  to  The  Union  Bank  of  your  place,  C.  E. 
Rogers,  Cashier. 

Form  27.  Draft  of  Traders  National  Bank,  Tonawanda,  on  Chemical 
National  Bank,  New  York,  dated  Nov.  22,  drawn  in  favor 
of  D.  E.  Mosher,  and  transferred  by  him  to  your  firm  by  full 
indorsement,  for  $392,  S.  H.  Lyman,  Cashier. 

Form  28.  Notice  of  protest  of  note  of  J.  N.  Smith  &  Co.,  left  at  The  Union 
Bank  for  collection.  The  notice  is  dated  Nov.  25,  W.  E.  King, 
Notary  Public.    The  note  is  dated  Sept.  26. 

If  business  practice  is  used  and  the  Incoming  Business  Forms  are  not  used,  the 
notice  of  protest  may  be  prepared  by  the  student;  be  guided  by  Form  VIII,  Appendix  F. 

Note.   A  notice  of  protest  is  generally  partly  printed  and  partly  written,  but  this  is 
not  necessary. 

A  notice  of  protest  must  include  the  following  items  of  information  : 

A  full  description  of  the  paper. 

A  statement  to  the  effect  that  payment  has  been  demanded  and  refused. 

A  statement  to  the  effect  that  the  holder  depends  on  the  indorser  for  settlement. 

Form  29.  Invoice  of  Eureka  Mills,  Little  Falls,  dated  Nov.  24.  Terms : 
5-day  draft  for  $150;  balance  in  30  da.,  less  1%.  Items  as 
follows : 

10  pc.  (52,  45,  40,  41,  42,  40,  52,  50,  52,  47)  Taffeta  Silk 

10  pc.  (52,  51,  60,  60,  61,  60,  62,  61,  58,  53)  Wamsutta  Cotton 

50  doz.  spools  Thompson  Thread 

25  doz.  Whalebones 

12  pc.  (42,  401,  45,  40,  45,  47f ,  41i,  44,  47,  49,  50,  50)  Wash  Silk 

15  pc.  (41,  52,  48,  62,  61,  47,  58,  57,  56,  52,  41,  42,  43|,  41,  42) 

Striped  Denim 
10  pc.  (48,  42,  53,  47,  49,  41,  48,  52,  52,  48)  B.  W.  Crepon 
5  pc.  (42,  48,  52,  58,  50)  Fancy  Wool  Cheviot 

Form  30.  Draft  of  Eureka  Mills,  Little  Falls,  dated  Nov.  24,  drawn  on 

your  firm,  in  favor  of  themselves,  at  5  da.  from  date,  for 

*150. 
Form  31.  Note  of  Eaton  &  Co.,  Williamson,  dated  Nov.  26,  drawn  at  30 

da.,  in  favor  of  your  firm,  with  interest  at  6%,  payable  at 

The  Union  Bank,  for  $750. 
Form  32.  Check  of  J.  N.  Badger,  City,  dated  Nov.  27,  drawn  on  Traders 

National  Bank  in  favor  of  your  firm,  for  $313.35. 


SET  VII.   DRY  GOODS  257 

Form  33.  Sight  draft  of  C.  D.  Washburn,  Bedford,  dated  Nov.  27,  drawn 
on  Howard,  Fitzsimmons  &  Co.,  City,  in  favor  of  your  firm, 
for  $150. 

Form  34.  Draft  of  Traders  National  Bank,  Rush,  on  Chemical  National 
Bank,  New  York,  dated  Nov.  27,  drawn  payable  to  Gardiner 
&  Sprong,  and  transferred  by  them  to  your  firm  by  full  in- 
dorsement, for  1596.33,  C.  O.  Moran,  Cashier. 

Form  35.  Check  of  L.  O.  Sweetland,  Buffalo,  dated  Nov.  27,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  1533.70. 

Form  36.  Bill  of  Citizens  Carting  Co.,  City,  dated  Nov.  29.  Terms :  cash. 
Items  as  follows : 

Nov.  24,  Cartage,  |2.25;  Freight,. $39.42 

25,  Cartage,    1.75 

26,  Cartage,    1.75 ;  Freight,    42.69 

27,  Cartage,    2.00 ;  Freight,    16.20 

28,  Cartage,    1.50 

29,  Cartage,      .75 

The  bill  is  receipted  for  Citizens  Carting  Co. 

Form  37.  Invoice  of  Freeman  Glove  Co.,  City,  dated  Nov.  28.  Terms 
2/10,  net  30  da.    Items  as  follows : 

25  doz.  Ladies'  Kid  Gloves  25  doz.  Men's  Kid  Gloves 

Form  38.  Invoice  of  Geo.  A  Wright  &  Co.,  Brooklyn,  dated  Nov.  28. 
Terms:  3/10,  net  60  da.    Items  as  follows: 

20  pc.  Velvet  Ribbon 

20  pc.  Marquise  Lace 

20  pc.  Black  Chantilly  Lace 

10  pc.  (42,  48,  52,  58,  62,  38,  49,  51,  54,  46)  Percale  Shirting 

10  pc.  (58,  42,  49,  51,  54,  46,  58,  42,  57,  43)  F.  W.  Cheviot 

10  pc.  (47,  53,  64,  36,  52,  48,  49,  51,  48,  52)  C.  S.  Lining 

6  pc.  (47,  52,  62,  38,  45,  55)  Amazon  Cloth 

5  pc.  (49|,  40^,  60f ,  50^,  49)  Barjeon  Cashmere 

Form  39.  Invoice  of  Clinton  Mills,  Syracuse,  dated  Nov.  28.  Terms : 
3/10,  net  60  da.    Items  as  follows : 

10  pc.  (49|,  50J,  52|,  471,  42^,  47^,  62,  48,  61,  39)  B.  W.  Lansdowne 

5  pc.  (47|,  521,  48^,  51f ,  50)  Scotch  Cheviot 
20  pc.  Grosgrain  Ribbon 


258 


BOOKKEEPING 


Memoranda  of  Transactions  iTor  November 
Wednesday,  Nov.  19 

In  this  set,  the  student  will  not  be  a  member  of  the  firm  as  in  the  pre- 
vious sets,  but  he  will  act  as  bookkeeper  and  confidential  clerk  for  the 
wholesale  dry-goods  house  of  A.  J.  Morley  &  Co.,  located  at  624  North 
Ave.,  City. 

The  members  of  the  firm  have  decided  to  give  him  a  power  of  at- 
torney, in  order  that  he  may  sign  and  indorse  notes,  checks,  and  all 
other  negotiable  paper  of  the  firm. 

Take  the  power  of  attorney.  Form  1,  fold  it  properly,  and  in  the  upper 
right-hand  corner  write: 


Power  of  Attorney 

A.  J.  Morley  &  Co. 

to 

Student 

Nov.  19,  19 — 


Note.  If  the  tablet  of  rncoming  Business  Forms  is  not  used  in  the  business  practice, 
the  power  of  attorney  may  be  prepared  by  the  student  as  suggested  in  Form  1. 

Your  firm  has  decided  to  withdraw  the  balance  on  deposit  in  Traders 
National  Bank,  City,  with  whom  they  have  heretofore  done  their  banking 
business,  and  deposit  it  in  The  Union  Bank. 

Take  the  check.  Form  2,  for  $4834.44,  indorse  it,  make  out  a  deposit 
ticket,  place  both  in  the  pass  book,  and  open  an  account  at  The  Union 
Bank. 

The  firm  name  must  be  written  as  follows  on  all  indorsements,  etc., 

in  this  set : 

A.  J.  Morley  &  Co., 

by  Student,  Atty. 

In  opening  an  account  for  the  firm  by  whom  you  are  employed  as 
above,  you  may  take  with  you  to  the  bank  your  power  of  attorney, 
showing  the  right  conferred  upon  you. 

Enter  the  amount  of  the  check  in  the  check  book ;  also,  as  a  balance 
in  the  cashbook.    Keep  the  bank  account  as  in  the  previous  sets. 

The  student  should  bear  in  mind  that  he  is  not  opening  a  set  of  books,  but 
that  he  is  taking  up  the  work  where  another  left  it. 


SET  VII.   DRY  GOODS 


259 


INSTRUCTIONS  WHEN  ASSUMING  CHARGE  OF  A  SET  OF  BOOKS 

1.  Prove  the  cash. 

a.  Xi  it  proves,  balance  the  cashbook  and  post  the  items  that  are  not  already  in 
the  ledgers. 

h.  If  it  does  not  prove,  determine  the  date  on  which  it  did  prove,  and  trace  the 
errors  if  you  can.  If  unable  to  find  the  errors,  report  to  your  employers  and  proceed 
as  instructed  by  them. 

2.  Post  all  the  books  to  date,  and  take  a  trial  balance  from  the  general  ledger. 
If  unable  to  get  a  trial  balance,  find  the  last  trial  balance  and  compare  it  with  the 
ledger  items  of  that  date.  If  there  are  no  discrepancies  in  that  sheet,  proceed  to 
trace  the  posting  to  the  general  ledger  since  the  date  of  the  trial  balance  which  is 
correct.  Report  errors  and  discrepancies  to  your  employers  and  proceed  as  instructed 
by  them. 

3.  In  like  manner,  test  the  correctness  of  the  sales  ledger  and  the  purchase  ledger. 
If  there  are  any  errors,  try  t©  locate  them. 

After  inspecting  the  books  of  your  firm  you  find  that  everything  is  correct. 

The  following  is  the  trial  balance  of  the  general  ledger : 
Trial  Balance,  A.  J.  Morley  &  Co.,  November  19, 


15 

Accts.  Rec. 

16119 

10 

" 

32 

Mdse.  General 

16142 

96 

33 

Bills  Rec. 

4102 

50 

19 

Interest 

15 

62 

C.B. 

Cash 

4834 

44 

14 

Office  Fixtures 

1750 

42 

Real  Estate 

10500 

40 

Insurance 

150 

47 
52 
52 

1 
1 
1 

Expense 

Accts.  Pay. 

Bills  Pay. 

A.  J.  Morley  &  Co.,  Investment  account 

A.  J.  Morley,  Private  account 

D.  0.  Mills,  Private  account 

50 

60 

10302 
4260 

38750 
162 
150 

22 
50 

44 

Cash  Suspense 

40 

50 

53665 

22 

53665 

22 

Your  firm  has  decided  to  open  new  books.  Enter  the  items  of  the 
trial  balance  in  the  general  ledger.  For  the  date  and  explanation,  write : 
Nov.  19,  per  General  Ledger  A,  and  use  the  page  of  the  old  ledger  as 
shown  on  the  trial  balance.   Allow  one  third  of  a  page  for  each  account. 

Write  the  name  of  the  firm  and  the  names  of  the  two  proprietors  on 
pagel. 


260 


BOOKKEEPING 


Write  these  names  on  page  2 :  Merchandise  General^  Merchandise  Pur- 
chases, Merchandise  Sales. 

The  two  accounts  last  named  will  be  nsed  when  posting  the  work  at  the  close 
of  November. 

Prepare  an  index  for  each  ledger,  allowing  a  full  page  for  each. 
An  abstract  of  the  sales  ledger  shows  the  following  balances : 


Abstract  of  Sales  Ledger,  November  19, 

19— 

8 

Baker,  Shaw  &  Co.,  Clifton  Springs 

1250 

5 

C.  D.  Washburn,  Bedford 

1300 

7 

F.  M.  Reed  &  Co.,  Batavia 

3363 

47 

8 

B,  N.  Acker,  Byron 

1307 

44 

9 

Chas.  H.  Dean  &  Co.,  Northampton 

490 

25 

10 

F.  0.  Saunders,  Sodus 

275 

12 

Knowlton  &  Beach,  Rome 

2363 

47 

16 

J.  V.  Richardson  &  Co.,  Earlville 

612 

25 

19 

D.  E.  Mosher,  Tonawanda 

894 

09 

20 

Eaton  &  Co.,  Williamson 

1540 

71 

21 

Gardiner  &  Sprong,  Rush 

1316 

70 

24 

Fred  S.  Goodwin,  Savannah 

1028 

84 

27 

Green  &  Gregory,  Clyde 

376 

88 

15 

Balance  per  Accts.  Bee.  in  G.  L. 

16119 

10 

16119 

10 

16119 

10 

Enter  the  above  accounts  in  the  sales  ledger,  four  to  the  page.  For 
the  date  and  explanation,  write :  Nov.  19,  per  Sales  Ledger  A,  and  give 
the  page  of  the  old  sales  ledger  indicated  in  the  above  abstract.  Write  the 
addresses  of  the  firms  in  the  ledger. 

An  abstract  of  the  purchase  ledger  shows  the  following  balances : 


Abstract  of  Purchase  Ledger,  November  19,  19- 


24 

Jordan,  Marsh  &  Co.,  Boston 

1807 

33 

27 

R.  W.  White  &  Co. ,  New  York 

1556 

14 

29 

F.  R.  Stearns  &  Co.,  Boston 

3030 

' 

34 

Houghton,  Dutton  &  Co.,  Chicago 

2014 

m 

35 

Eureka  Mills,  Little  Falls 

681 

I'o 

36 

Ellis  Mfg.  Co.,  Springfield 

912 

34 

43 

McDowell,  Cook  &  Co.,  Trenton 

75 

49 

45 

Ogden  Mills,  Akron 

Balance  per  Accts.  Pay.  in  G.  L. 

10302 

22 

224 

51 

10302 

22 

10302 

22 

I 


SET  VII.   DRY  GOODS  261 

Enter  the  foregoing  accounts  in  the  purchase  ledger,  four  to  the  page. 
For  the  date  and  the  explanation,  write :  Nov.  19,  per  Purchase  Ledger  A, 
and  give  the  page  of  the  old  purchase  ledger  indicated  in  the  foregoing 
abstract.    Write  the  addresses  of  the  firms  in  the  ledger. 

The  bill  book  shows  that  the  following  notes,  left  at  The  Union  Bank 
for  collection  at  the  close  of  yesterday's  business,  are  unpaid. 

1.  Note  of  J.  E.  King,  dated  Akron,  Ohio,  Oct.  24,  payable  at  Alliance 
Banl^,  Akron,  Ohio,  drawn  at  30  da.,  in  favor  of  A.  J.  Morley  &  Co., 
for  tl02.50. 

2.  Note  of  J.  N.  Smith  &  Co.,  dated  City,  Sept.  26,  payable  at  The 
Union  Bank,  City,  drawn  at  60  da.,  with  interest  at  6%,  in  favor  of 
A.  J.  Morley  &  Co.,  for  $500. 

3.  Note  of  C.  W.  Gray  &  Co.,  dated  Bath,  Oct.  27,  payable  at  First 
National  Bank  of  Bath,  drawn  at  30  da.,  with  interest  at  6%,  in  favor 
of  A.  J.  Morley  &  Co.,  for  $1500. 

4.  Note  of  Jaggard  &  Co.,  dated  Trenton,  Oct.  29,  payable  at  Mer- 
chants Bank,  Trenton,  drawn  at  SO  da.,  in  favor  of  A.  J.  Morley  &  Co., 
for  $700. 

5.  Note  of  S.  C.  Williams,  Warsaw,  dated  Nov.  3,  payable  at  Com- 
mercial Bank,  Warsaw,  drawn  at  30  da.,  in  favor  of  A.  J.  Morley  &  Co., 
for  11300. 

Enter  the  above  notes  in  the  bill  book.  They  were  all  left  at  The 
Union  Bank  for  collection  on  Nov.  18. 

The  following  outstanding  notes  are  also  shown  in  the  bill  book : 

1.  Note  in  favor  of  D.  N.  Snow  &  Co.,  dated  Nov.  3,  payable  at  The 
Union  Bank,  drawn  at  30  da.,  with  interest  at  6%,  by  A.  J.  Morley  &  Co., 
for  $3000. 

2.  Note  in  favor  of  Jones  Mfg.  Co.,  dated  Oct.  31,  payable  at  The 
Union  Bank,  drawn  at  30  da.,  by  A.  J.  Morley  &  Co.,  for  |1260. 

Enter  the  above  bills  payable  in  the  bill  book. 

Note.  It  is  assumed  that  the  two  bills  payable  are  with  The  Union  Bank  for  collec- 
tion. The  student  will  therefore  need  to  write  both  notes  and  hand  them  in.  (See  note, 
page  216.) 

Check  carefully  all  the  work  in  the  new  books.  If  everything  is  cor- 
rect, hand  them  in  for  examination. 

Thursday,  Nov.  20 

The  account  of  Green  &  Gregory,  Clyde,  cannot  be  collected  in  full, 
as  the  firm  is  financially  involved,  but  they  have  effected  a  compromise 
with  their  creditors. 


262  BOOKKEEPING 

A   Receive  of  them  their  note,  at  3  mo.  from  Nov.  19,  at  the  rate  of  50(^ 
on  the  dollar,  in  full  of  account  to  date,  $188.44,  Form  3. 

Debit  Bills  Receivable  and  Loss  and  Gain,  ai^d  credit  Green  Sf  Gregory.  Post  the 
entry  and  close  the  account  of  Green  &  Gregory.  In  the  account,  make  two  items  of 
their  credit  as  follows  :  Nov.  20,  Bills  Rec,  $188.44  ;  Nov.  20,  Loss  and  Gain,  $188.44. 
This  is  done  so  that  the  account  on  its  face  shows  the  loss  resulting  from  the  failure 
of  the  firm. 

The  Citizens  Carting  Co.  has  delivered  to  you  the  goods  ordered  of 
Jordan,  Marsh  &  Co.,  on  Nov.  14,  Form  4. 

Accept,  payable  at  The  Union  Bank,  their  draft  dated  Nov.  19,  at 
10  days'  sight,  for  $500,  Form  5. 

Drawji  sight  draft  on  Chas.  H.  Dean  &  Co.,  Northampton,  in  favor 
of  your"^rm,  for  $300. 

Indorse  it  properly  and  leave  it  with  the  bank  for  collection. 

- —  Receive  of  F.  M.  Reed  &  Co.,  Batavia,  a  New  York  draft,  in  full  of 
account,  less  3%,  Form  6. 
---Draw  a  cash  check  for  office  use,  $^50. 
Ask  for  $5  in  change. 

Pay  Geo.  Ellis  cash,  for  cleaning  the  store  and  tlie  basement,  $10. 
Make  out  a  daily  statement.    Post. 
Submit  all  books  to  the  instructor  for  approval. 

Friday,  Nov.  21 

The  Citizens  Carting  Co.  has  completed  the  delivery  of  the  goods 
ordered  of  R.  W.  White  &  Co.,  on  Nov.  15,  Form  7. 

D.  O.  Mills  and  A.  J.  Morley  each  withdraw  for  private  use  cash,  $50. 

Accept  the  draft  of  F.  R.  Stearns  &  Co.,  Boston,  in  favor  of  them- 
selves, dated  Nov.  20.  at  4  days'  sight,  payable  at  The  Union  Bank,  for 
$630,  Form  8. 

Pay  F.  M.  Upton  &  Co.'s  bill  for  coal,  by  check,  $31.50,  Form  9. 

Goods  ordered  of  the  Ellsworth  Mills,  Detroit,  on  Nov.  13,  have  been 
received  to-day.  Form  10. 

Receive  of  Knowlton  &  Beach,  Rome,  their  check,  to  apply  on  account, 
for  $275,  Form  11. 

Receive  of  Fisher  Bros.,  Tonawanda,  a  bill  for  1  mahogany  roll-top 
office  desk,  $125,  Form  12.  Pay  the  bill  by  a  sight  draft  on  D.  E.  Mosher, 
Tonawanda,  as  he  has  agreed  to  honor  the  draft  on  presentation. 

Enter  in  the  journal.    Debit  Office  Fixtures. 

Goods  ordered  of  Freeman  Glove  Co.,  City,  on  Nov.  18,  have  been 
received,  Form  13. 


SET  VII.   DRY  GOODS  263 

Receive  of  C.  D.  Washburn,  Bedford,  a  sight  draft  on  Freeman  Glove 
Co.,  City,  in  favor  of  your  firm,  for  $56.25,  Form  14.  He  also  orders 
the  following  goods : 

5  pc.  (42J,  40,  52,  53^,  49)  Am.  B.  D.  Silk 

3  pc.  (47^,  48,  52^)  Amazon  Cloth 
25  doz.  Boys'  Heavy  Cotton  Hose 
15  gro.  Bone  Buttons 
15  doz.  spools  Corticelli  Silk 
25  pc.  Fancy  Black  Ribbon 

Fill  the  order.    Terms :   2/10,  1/30,  net  60  da. 

The  box  and  goods  when  packed  for  shipment  weigh  200  lb.  Prepare  the  bill  of 
lading  in  the  regular  way,  but  do  not  itemize  the  articles  sent.  The  whole  order 
may  be  described  as  follows : 

1  box  Dry  Goods 

Write  a  letter  to  Freeman  Glove  Co.,  inclosing  C.  D.  Washburn's 
draft,  to  apply  on  account. 

Deposit  the  New  York  draft  and  the  check  on  hand ;  ^V  %  collection 
on  the  check. 

Make  out  a  daily  statement  and  have  it  approved.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Saturday,  Nov.  22 

The  following  orders  were  received  in  this  morning's  mail. 

1.  From  F.  O.  Saunders,  Sodus : 

5  doz.  Ladies'  Kid  Gloves  2  pc.  (50i,  42)  Taffeta  Silk 

15  doz.  pc.  L.  Torchon  Lace  5  doz.  Men's  Balbriggan  Half  Hose 

5  pc.  (54|,  50,  47^,  48,  49)  Striped  Denim 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  175  lb. 

2.  From  Eaton  &  Co.,  Williamson : 

9  doz.  Whalebones  5  doz.  Men's  Kid  Gloves 

5  pc.  Velvet  Bibbon  5  pc.  (42,  47,  52,  54,  49)  P.  Shirting 

4  pc.  (52,  60,  49^,  50)  Simpson  Mourning  Print 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  200  lb. 

3.  From  Gardiner  &  Sprong,  Rush : 

5  pc.  Duchesse  Lace  4  pc.  (47,  52,  45,  50)  S.  Cheviot 

5  doz.  Men's  Kid  Gloves  3  pc.  (49^,  47f ,  49i)  B.  W.  Crepon 

5  doz.  spools  Thompson  Thread       3  pc.  (51|,  52,  52|)  V.  C.  Cloth 


264  BOOKKEEPING 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  200  lb. 

With  the  above  order  was  a  check,  to  apply  on  account,  for  |300, 
Form  15. 

-,  Receive  of  Fred  S.  Goodwin,  Savannah,  a  sight  draft  on  Geo.  R.  Tilli- 
son.  City,  to  apply  on  account,  for  |250,  Form  16. 

Our  firm  is  assured  that  the  draft  will  be  paid  on  presentation ;  credit  Goodwin 
for  its  face.    Place  the  draft  in  the  Business  Cash  envelope. 

Goods  ordered  of  Ellis  Manufacturing  Co.  on  Nov.  17  have  been  de- 
livered by  the  Citizens  Carting  Co.,  Form  17. 

— Pay  by  check  the  bill  of  the  Citizens  Carting  Co.,  for  freight  and  cartage 
to  date,  $169.54,  Form  18. 

Charge  this  to  Merchandise  Purchases  account. 

Pay  salaries  for  the  week  in  cash,  |135. 
Charge  Salary. 

Write  a  letter  to  William  J.  Tenny,  Albany,  inclosing  a  check  in 
payment  of  his  November  salary,  |140.  He  is  to  start  on  Monday  on  a 
two  weeks'  vacation. 

Charge  Traveling  Expenses.    (This  is  the  salary  of  a  traveling  salesman.) 

Receive  of  B.  N.  Acker,  Byron,  his  note,  in  favor  of  your  firm,  drawn 
at  30  da.  from  Nov.  21,  with  interest  at  6%,  payable  at  Alliance  Bank 
of  Byron,  for  flOOO,  Form  19. 

Receive  of  J.  V.  Richardson  &  Co.,  Earlville,  their  draft,  drawn  at 
10  da.  after  date,  on  H.  A.  McDowell  &  Co.,  your  city,  in  favor  of  your 
firm,  to  apply  on  account,  for  $150,  Form  20. 

Take  the  above  draft  to  your  offices  or  to  the  instructor  for  acceptance. 

They  also  order  the  following  goods : 

5  gro.  Gilt  Buttons 

5  pc.  (45,  42,  54,  56,  55|)  Fancy  Gingham 

4  pc.  (56,  621,  66|,  64)  Cotton  Surah  Lining 

2  pc.  (45|,  47)  Black  Wool  Crepon 

5  pc.  (451,  453^  u,  46,  45)  Bengaline  Silk 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  320  lb. 
_-^  John  B.  Howard  &  Co.,  City,  order  : 

5  pc.  (471,  48,  52,  60,  57)  Barjeon  Cashmere 

3  pc.  (42^,  44J,  46)  Black  English  Camel's  Hair 


SET  VII.   DRY  GOODS  265 

They  inclose  their  check  in  payment  of  the  bill,  less  2%,  Form  21. 

Enter  the  foregoing  in  the  sales  book,  deducting  the  2%  discount.  Enter  the 
check  to  the  credit  of  John  B.  Howard  &  Co.  in  the  cashbook.  Place  a  small  V  in 
the  folio  columns  of  the  sales  book  and  the  cashbook,  opposite  the  firm  name,  to 
indicate  that  neither  item  should  be  posted.  This  illustrates  how  some  business 
houses  keep  spot  cash  sales  out  of  the  sales  ledger. 

,.^-— -D.  O.  Mills,  who  has  been  out  of  town  several  days,  has  just  returned. 
In  looking  over  the  books  he  notices  the  Cash  Suspense  account  of  $40.50, 
and  is  reminded  that  on  the  day  he  left  for  Boston,  Nov.  17,  he  sold 
Joseph  L.  Dillingham,  City,  for  cash,  2  pc.  (40,  41)  Scotch  cheviot ; 
the  cash  was  put  in  the  cash  drawer,  but  no  bill  was  rendered  or 
memorandum  made. 

' — Make  the  proper  entries  to  adjust  this  blunder,  proceeding  as  follows : 

.- — '1.  Make  an  entry  on  the  right  side  of  the  cashbook,  debiting  Cash  Suspense, 

$40.50.    (This  sum  has  been  carried  as  a  cash-over  item.) 

2.  Enter  in  the  sales  book  in  the  regular  way.  Check  the  amount  V,  so  that  it 
will  not  be  posted. 

,    3.  Credit  Joseph  L.  Dillingham  on  the  left  side  of  the  cashbook  in  the  regular 
way.    Check  the  amount  V,  so  that  it  will  not  be  posted. 

SUSPENSE  ACCOUNT  EXPLAINED 

^-  The  Suspense  account,  as  it  is  sometimes  used,  contains  the  items  of  cash  over  or 
cash  shortage.  Sometimes  when  several  persons  handle  the  cash,  money  is  taken  in 
or  paid  out  and  no  memorandum  made ;  and,  again,  sometimes  a  remittance  is  made 
in  such  a  way  as  to  fail  to  disclose  the  name  of  the  person  who  made  it.  In  such 
cases,  proceed  as  follows  : 

a.  For  cash  over:  debit  Cash  and  credit  Cash  Suspense  account. 

b.  For  cash  shortage :  debit  Cash  Suspense  account  and  credit  Cash. 

The  Cash  Suspense  account  may  represent  either  a  resource  or  a  liability  or  a 
loss  or  a  gain ;  as, 

a.  When  items  of  suspense  have  been  of  long  standing  at  the  time  of  making  a 
statement  of  the  business,  the  balance  is  usually  carried  into  loss  or  gain. 

b.  When  such  items  have  not  been  of  long  standing,  they  are  treated  either  as  a 
resource  or  a  liability. 

Give  M.  P.  Keeler  a  check  for  the  private  account  of  D.  O.  Mills, 
$100. 

Give  H.  C.  Benway  a  check  for  painting  the  store,  $120. 

Charge  Expense. 

Deposit  the  two  checks  and  the  sight  draft  on  hand ;  ^^  %  collection 
on  Gardiner  &  Sprong's  check. 

Make  out  a  daily  statement  and  have  it  approved.    Post. 

Submit  all  books  to  the  instructor  for  approval. 


266  BOOKKEEPING 

Monday,  Nov.  24 

—  Discount  at  The  Union  Bank  the  note  received  of  B.  N.  Acker  on 
Nov.  22. 

HOW  TO  DISCOUNT  AN  INTEREST-BEARING  NOTE 

1.  Add  the  interest  for  the  full  time  to  the  face  of  the  note. 

2.  Discount  the  amount  of  the  note  (the  face  plus  the  interest)  for  the  time  from 
the  date  of  discount  to  the  maturity  of  the  note. 

3.  Subtract  the  discount  found  from  the  amount  of  the  note,  and  the  difference  is 
the  sum  for  which  you  should  receive  credit. 

Credit  Bills  Receivable  in  the  cashbook  for  the  face  of  the  note  ;  credit  Interest  for 
the  total  amount  of  the  interest,  and  debit  Interest  for  the  discount.  Make  the  proper 
record  in  the  bill  book. 

Goods  ordered  of  C.  O.  Bond  &  Co.,  Philadelphia,  on  Nov.  17  have 
been  received.  Form  22. 

Accept,  payable  at  The  Union  Bank,  the  draft  which  was  inclosed 
with  the  above  invoice,  for  |250,  Form  23.  The  draft  is  dated  Nov.  22 
and  is  payable  in  10  da. 

A  telegraphic  order  has  been  received  from  Evans,  Hoyt  &  Co.,  Troy, 
ordering  the  following  goods  to  be  shipped  by  fast  freight,  subject  to 
the  order  of  the  bank : 

6  pc.  (45,  42,  45,  47f ,  41i,  40)  Bengaline  Silk 

-  25  pc.  Black  Chantilly  Lace 
5  doz.  Whalebones 

5  pc.  (47^,  45,  41,  45^,  47)  Fancy  Boucle  Stripe 
5  pc.  (47,  52,  60,  65,  67)  Cotton  Surah  Lining 
5  pc.  (42,  40,  41,  40,  54)  Fine  English  Serge 

, .  Ship  to  the  order,  of  The  Union  Bank,  less  2%. 


Remember  to  make  out  all  the  necessary  papers,  using  an  Order  bill  of  lading. 
Indorse  the  draft,  attach  it  to  the  bill  of  lading,  and  leave  it  at  The  Union  Bank 
for  collection.    The  box  and  goods  weigh  350  lb. 

The  following  orders  were  received  in  this  morning's  mail.    Fill  them 
hi  the  regular  way.    Terms  on  the  first:   2/10,  1/30,  net  60  da.;  on  the 
second,  30-day  note,  with  interest,  in  10  da.,  less  1%. 
1.  From  F.  M.  Reed  &  Co.,  Batavia : 

10  pc.  (47^,  51,  45,  48,  49,  51^,  46,  49,  53,  52)  Gunner's  Duck 
10  pc.  Grosgrain  Ribbon 
5  doz.  Ladies'  Cashmere  Hose 
5  pc.  Marquise  Lace 

4  pc.  (42^,  47^,  45,  50)  Percale  Shirting 
2  pc.  (45,  46)  Simpson  Mourning  Print 
The  box  and  goods  weigh  320  lb. 


SET  VIL   DRY  GOODS  267 

2.  From  Berriman  &  Co.,  Syracuse : 

5  pc.  Velvet  Ribbon  3  pc.  (52|,  50|,  42)  Taffeta  Silk 

2  pc.  (42i,  45f )  Wash  Silk        4  pc.  (46^,  47^,  50,  52)  S.  Cheviot 
3  pc.  (46^,  47,  41)  Venetian  Crape  Cloth 

The  box  and  goods  weigh  230  lb. 

Pay  the  balance  due  Ogden  Mills,  Akron,  by  check,  less  2%. 
Write  a  letter,  inclosing  the  check. 

Receive  of  C.  D.Washburn,  Bedford,  a  check  in  payment  of  the  invoice 
of  Nov.  21,  less  2%,  Form  24. 

Write  a  letter  to  R.  W.  White  &  Co.,  New  York,  inclosing  a  check  in 
payment  of  the  invoice  of  Nov.  14,  less  3%.  Amount  of  the  invoice, 
*950.50. 

Also,  write  a  letter  to  Houghton,  Dutton  &  Co.,  Chicago,  inclosing  a 
check  in  payment  of  the  invoice  of  Nov.  15,  less  2%.  Amount  of  the 
mvoice,  J|379.50. 

Deposit  the  check  on  hand.    Collection,  ^0%. 

Make  out  a  daily  statement  and  hand  it  in.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Tuesday,  Nov.  25 

Your  firm  has  received  a  letter  from  Williams,  Howard  &  Co.,  Spring- 
field, asking  for  information  with  regard  to  the  financial  standing  and 
general  business  equipment  of  Starr,  Jordan  &  Co.,  of  your  city.  You 
are  asked  to  wire  your  reply. 

You  confer  with  A.  J.  Morley,  the  senior  member  of  your  firm,  and  at 
his  suggestion  send  a  telegram,  giving  the  following  information : 

The  firm  of  Starr,  Jordan  &  Co.  does  not  stand  well  financially  in  this  section. 
They  were  losers  to  the  extent  of  over  $10,000  by  the  faikire  of  Smith,  Jones  &  Co., 
Buffalo,  who  became  insolvent  about  six  months  ago ;  from  this  they  have  not 
fully  recovered,  and,  in  our  opinion,  will  not  recover  for  some  time  to  come.  The 
members  of  the  firm  are,  however,  men  of  sterling  integrity,  and  their  statements 
can  be  depended  upon. 

Write  the  telegram  and  observe  the  following : 

1.  Do  not  refer  to  the  firm  of  Starr,  Jordan  &  Co.  by  name,  since^ 
your  report  is  somewhat  unfavorable. 

2.  Limit  your  message  to  eighteen  words. 

3.  Do  not  prepay  the  charges. 

The  following  orders  were  received  in  this  morning's  mail.  Fill  each 
of  them  in  the  regular  way.    Terms :  2/10,  1/30,  net  60  da. 


268  BOOKKEEPING 

1.  From  Gardiner  &  Sprong,  Rush : 

5  pc.  (40,  41,  42,  45,  46)  Black  Wool  Lansdowne 
4  pc.  (42,  41^,  45|,  46)  Amazon  Cloth 

3  pc.  (47,  52,  64)  Cotton  Surah  Lining 

4  pc.  (52,  47,  48,  51)  Fancy  Wool  Cheviot 

5  pc.  (461,  47|,  52^,  56^,  50)  Barjeon  Cashmere 

5  gro.  Gilt  Buttons 
10  pc.  Fancy  Black  Ribbon 
12  doz.  spools  Corticelli  Silk 
10  doz.  Boys'  Heavy  Cotton  Hose 

2  doz.  Men's  Kid  Gloves 

3  pc.  (47,  421,  45)  Simpson  Mourning  Print 

The  above  was  shipped  in  two  boxes  weighing  when  packed  270  lb.  and  190  lb. 
respectively. 

2.  From  L.  O.  Sweetland,  Buffalo : 

3  pc.  (42|,  41,  45)  Simpson  Mourning  Print 
10  pc.  Velvet  Ribbon 
10  pc.  (50,  42,  53,  47,  41,  40,  45,  48^,  47^,  50)  Wash  Silk 

3  pc.  (42,  41,  45)  Fancy  Gingham 

3  pc.  (47,  42,  45)  Fine  English  Serge 

6  pc.  (42^,  42^,  45,  48^,  45,  40)  Fancy  Plaids 
The  box  and  goods  weigh  390  lb. 

—  Your  bank  informs  you  that  the  draft  drawn  on  Chas.  H.  Dean  &  Co. 
on  Nov.  20  has  been  collected.    Collection,  ^^q%. 

Receive  of  Knowlton  &  Beach,  Rome,  a  check,  to  apply  on  account, 
for  $1200,  Form  25. 

Pay  the  sight  draft  of  Houghton,  Button  &  Co.,  Chicago,  by  check, 
*750,  Form  26. 

Make  the  check  in  favor  of  The  Union  Bank,  as  the  draft  is  presented  by  them. 

The  draft  in  favor  of  F.  R.  Stearns  &  Co.  is  due  to-day,  payable  at  The 
Union  Bank. 

Issue  a  check  in  payment,  and  receive  the  canceled  acceptance. 

Receive  of  D.  E.  Mosher,  Tonawanda,  a  New  York  draft,  in  settle- 
ment of  the  mvoice  of  Nov.  15,  less  2%,  for  $392,  Form  27. 
Find  the  face  of  the  invoice. 

Deposit  the  check  and  the  New  York  draft  on  hand.  Collection  on 
the  check,  iV%* 

Your  bank  notifies  you  that  the  note  of  J.  E.  King,  left  for  collection, 
has  been  paid.    No  collection  charged. 


SET  VII.   DRY  GOODS  269 

Write  a  letter  to  Jordan,  Marsh  &  Co.,  Boston,  inclosing  a  check  in 
payment  of  the  invoice  of  Nov.  16,  less  3%.  Amount  of  the  invoice, 
|;719.50. 

Make  out  a  daily  statement  and  hand  it  in.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Wednesday,  Nov.  26 

^Receive  from  The  Union  Bank  a  notice  of  protest  of  J.  N.  Smith  & 
Co.'s  note,  due  yesterday.  Form  28.    Pay  the  protest  fees  in  cash,  |1. 

Write  Protested  in  the  Remarks  column  of  the  bill  book,  and  debit  Protest  Fees 
in  the  cashbook  for  the  notary's  charge  for  protesting. 

^^^11  paper  that  goes  to  protest  should  be  taken  out  of  the  Bills  Receiv- 
able account,  therefore  make  the  following  journal  entry :  Protested  Paper 
to  Bills  Receivable. 

In  the  general  ledger,  open  an  account  with  Protested  Paper. 

WHEN  PROTEST  IS  NECESSARY 

1.  When  payment  of  a  note  or  a  draft  has  been  formally  demanded  and  refused, 
it  should  be  protested. 

2.  All  foreign  drafts  must  be  protested,  either  for  nonpayment  or  for  non- 
acceptance,  or  the  drawers  or  indorsers  will  be  relieved  of  all  responsibility. 

3.  While  it  is  quite  unnecessary  to  protest  a  note  on  which  there  is  no  indorser, 
the  majority  of  banks  will  protest  all  paper  that  is  not  paid  at  maturity,  unless 
they  are  specifically  instructed  to  the  contrary.  No  protest  is  sometimes  printed  on 
a  perforated  slip  at  the  end  of  a  note  or  draft.  These  words  may  be  left  on  or 
detached  at  the  discretion  of  the  indorser  of  the  paper. 

VALUE  OF  PROTEST 

1.  In  a  general  way  a  protest  aids  in  securing  prompt  attention  on  the  part  of 
the  payer  to  all  his  maturing  negotiable  obligations  payable  at  a  bank. 
—  2.  A  protest  in  an  indirect  way  aids  the  business  man  in  the  collection  of  over- 
due accounts.  A  debtor  will  give,  in  most  cases,  more  serious  attention  to  a  sight 
draft  drawn  upon  him,  which  may  go  to  protest,  than  he  will  to  the  ordinary  state- 
ment of  an  account  or  to  a  request  for  a  remittance. 

METHOD  OF  PROTESTING 

1.  The  notary  takes  the  bill  and  demands  payment,  which  is  refused. 

2.  He  writes  a  statement  to  the  effect : 

a.  That  he  has  presented  and  demanded  payment  of  the  bill. 

h.  That  payment  has  been  refused. 

c  That  he  protests  against  the  drawers  and  the  indorsers. 

a.  That  due  notice  has  been  given  to  the  indorsers,  etc. 


270  BOOKKEEPING 

3.  He  affixes  his  name  and  seal  to  the  paper. 

4.  The  protest  is  then  attached  to  the  note  or  the  draft  and  is  filed  by  the  holder. 
(For  Certificate  of  Protest,  see  Form  VII,  Appendix  F.) 

W.  E.  Simpson,  City,  has  telephoned  for  the  following  goods.  He 
instructs  you  to  draw  on  him  at  sight  for  the  amount  of  the  bill. 

5  pc.  (421,  44|,  48,  51,  62)  Feather  Ticking 

2  pc.  (42^,  45)  Black  Wool  Crepon 

5  doz.  Boys'  Heavy  Cotton  Hose 

3  pc.  (47,  45,  52)  Bar j eon  Cashmere 

4  pc.  (45^,  46,  43,  41)  Amazon  Cloth 

3  pc.  (48,  52,  40)  Black  English  CamePs  Hair 

Fill  the  order.    Terms:  sight  draft,  less  2%. 

Draw  the  draft  and  place  it  in  the  Business  Cash  envelope.  Enter  in  the  sales 
book  and  the  cashbook.    Check  the  items  in  each. 

J.  N.  Badger,  City,  has  telephoned  for  the  following  goods : 

6  pc.  (45,  42,  41,  40,  53,  49)  Fancy  Boucle  Stripe 
25  pc.  Fancy  Black  Ribbon 

5  doz.  Ladies'  Kid  Gloves 
5  doz.  Men's  Kid  Gloves 

2  pc.  (42|,  41^)  Taffeta  Silk 
5  gro.  Jet  Buttons 

Fill  the  order.    Terms  :  2/10,  1/30,  net  60  da. 

The  Citizens  Carting  Co.  has  completed  the  delivery  of  the  goods 
ordered  of  Eureka  Mills  on  Nov.  18,  Form  29. 

Accept,  payable  at  The  Union  Bank,  the  draft  hi  favor  of  Eureka 
Mills,  for  $150,  Form  30. 

Receive  of  Eaton  &  Co.,  Williamson,  their  note  at  30  da.,  in  favor  of 
your  firm,  with  interest  at  6%,  for  $750,  Form  31. 

Write  a  letter  to  Ogden  Mills,  Akron,  ordering : 

10  pc.  Am.  Black  Dress  Silk  10  pc.  Fancy  Plaids 

10  pc.  Black  Wool  Crepon  10  pc,  Amazon  Cloth 

100  doz.  spools  CorticelH  Silk  10  pc.  B.  E.  Camel's  Hair 

10  pc.  Velvet  Ribbon 

Write  a  letter  to  Ellis  Manufacturmg  Co.,  inclosing  a  check  in  pay- 
ment of  the  invoice  of  Nov.  21,  less  3%. 
Deposit  the  sight  draft  on  hand. 
Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 


SET  VII.   DRY  GOODS  271 

Thursday,  Nov.  27  > 

Write  a  letter  to  McDowell,  Cook  &  Co.,  Trenton,  ordering : 

10  pc.  Wamsutta  Cotton  10  pc.  Taffeta  Silk 

10  pc.  Wash  Silk  7  pc.  Striped  Denim 

10  pc.  Venetian  Crape  Cloth  7  pc.  Scotch  Cheviot 

Give  A.  J.  Morley  a  check  for  private  use,  for  ^50. 

Give  S.  M.  Wells  a  check  for  the  private  account  of  D.  O.  Mills,  for  |50. 

Telegraph  Houghton,  Button  &  Co.,  Chicago,  ordering : 

50  pc.  Black  Chantilly  Lace  125  pc.  Velvet  Ribbon 

50  pc.  Fancy  Black  Ribbon  60  pc.  Duchesse  Lace 

Pay  the  cost  of  the  telegram  in  cash,  |1.50. 

Fill  the  following  orders,  which  were  received  in  this  morning's  mail. 
Terms:  2/10,  1/30,  net  60  da. 

1.  From  Jas.  B.  Stillman,  Rochester: 

3  pc.  (47,  42,  45)  P.  Shirting  2  pc.  (52,  61)  S.  Denim 

4  doz.  Men's  B.  Half  Hose  2  gro.  Jet  Buttons 

3  doz.  pc.  L.  Torchon  Lace  3  pc.  Grosgrain  Ribbon 

The  box  and  goods  weigh  140  lb. 

2.  From  Earl  &  Sampson,  Hopewell: 

2  pc.  (42,  45)  P.  Shirting  2  pc.  (42,  47)  G.  Duck 

2  pc.  (45,  52)  Fine  English  Serge  2  pc.  (47,  45)  S.  Cheviot 

2  pc.  (48,  411)  Fancy  Wool  Cheviot 

The  box  and  goods  weigh  160  lb. 

Your  bank  notifies  you  that  the  note  of  C.  W.  Gray  &  Co.,  left  for 
collection,  has  been  paid.  Face  of  the  note,  |1500.  Interest  to  date, 
^7.50.    Collection  charged,  |1.50. 

Receive  a  check  of  J.  N.  Badger  in  full  for  the  bill  of  Nov.  26,  less 
2%,  Form  32. 

Deposit  the  check  just  received. 

Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Friday,  Nov.  28 

Receive  of  C.  D.  Washburn,  Bedford,  a  sight  draft  on  Howard,  Fitz- 
simmons  &  Co.,  City,  to  apply  on  account,  for  $150,  Form  33. 

It  has  been  agreed  that  the  draft  will  be  paid  on  presentation.  Place  it  in  your 
Business  Cash  envelope  and  credit  C.  D.  Washburn  in  the  cashbook. 


272  BOOKKEEPIKG 

Receive  of  Gardiner  &  Sprong,  Rush,  a  New  York  draft  in  payment 
of  the  invoice  of  Nov.  22,  less  2%,  Form  34. 

Discount  at  The  Union  Bank  the  note  received  of  Eaton  &  Co.  on 
Nov.  26  and  receive  credit  for  the  proceeds. 

Telephone  Freeman  Glove  Co.,  City,  ordering : 

25  doz.  Ladies'  Kid  Gloves  25  doz.  Men's  Kid  Gloves 

Write  a  letter  to  Jordan,  Marsh  &  Co.,  Boston,  ordering : 

25  pc.  Bar j eon  Cashmere  25  pc.  Fancy  Wool  Cheviot 

10  pc.  Amazon  Cloth  25  pc.  Black  Wool  Crepon 

Remit  Freeman  Glove  Co.,  City,  a  check  in  payment  of  the  balanj.* 
due  on  the  invoice  of  Nov.  21,  less  2%. 

Compute  the  2%  on  the  face  of  the  invoice,  then  subtract  the  payment  of  Nov.  21 ; 
issue  a  check  for  the  balance. 

Fill  the  following  orders.    Terms:  2/10,  1/30,  net  60  da. 

1.  From  Benj.  Tracy  &  Co.,  City : 

15  doz.  Men's  Kid  Gloves 
15  doz.  Ladies'  Kid  Gloves 
6  pc.  (42,  411,  45|,  42^,  44^,  40)  Fine  English  Serge 

6  pc.  (421,  43^,  45,  47i,  48,  49)  Fancy  Plaids 
3  pc.  (42^,  40,  44)  Fancy  Gingham 

2.  From  F.  M.  Reed  &  Co.,  Batavia: 

7  pc.  (42,  41,  40|,  45,  47i,  42,  47)  Am.  Black  Dress  Silk 
5  pc.  (42^,  46,  42,  43,  40)  Amazon  Cloth 

5  pc.  (42^,  40,  42,  43i,  45)  Black  Wool  Lansdowne 
5  doz.  Ladies'  Kid  Gloves 
10  doz.  Whalebones 
5  pc.  Duchesse  Lace 

The  box  and  goods  weigh  390  lb. 

Deposit  the  sight  draft  on  hand,  also  the  New  York  draft.  Collection 
on  the  sight  draft,  yo%. 

Make  out  a  daily  statement.    Post. 
Submit  all  books  to  the  instructor  for  approval. 

Saturday,  Nov.  29 

Your  bank  informs  you  that  the  sight  draft  attached  to  a  bill  of  lading 
of  Nov.  24  has  been  collected.    Collection,  yV^- 

Receive  a  check  from  L.  O.  Sweetland,  Buffalo,  in  payment  of  the 
invoice  of  Nov.  25,  less  2%,  Form  35. 


SET  VII.    DRY  GOODS  273 

Your  acceptance  in  favor  of  Eureka  Mills  is  due  to-day,  payable  at 
The  Union  Bank. 

Issue  a  check  in  payment. 

Pay  the  bill  of  Citizens  Carting  Co.  by  check,  for  freight  and  cartage 
to  date,  $108.31,  Form  36. 

Charge  this  to  Merchandise  Purche^ses  account. 

Draw  a  cash  check  for  ofhce  expenses,  |150. 
Pay  salaries  for  the  week  in  cash,  |135. 

Goods  ordered  of  Freeman  Glove  Co.  on  Nov.  28  have  been  delivQred, 
Form  37. 

Fill  the  following  orders.    Terms:  2/10,  1/30,  net  60  da. 

1.  From  F.  O.  Saunders,  Sodus : 

6  pc.  (42,  45,  47,  42,  47,  48^)  S.  Denim  10  gro.  Gilt  Buttons 

4  pc.  (52,  47,  531,  48)  Taffeta  Silk  10  doz.  Boys'  H.  C.  Hose 

7  pc.  (45|,  42,  45,  46,  47|,  40,  42)  Fancy  Gingham 

The  box  and  goods  weigh  350  lb. 

2.  From  B.  N.  Acker,  Byron : 

25  doz.  spools  Corticelli  Silk 

25  gro.  Bone  Buttons 
5  pc.  (421,  43,  45,  44^,  40)  Bengaline  Silk 
5  pc.  (401,  42^,  40,  41,  42)  Cotton  Surah  Lining 
5  pc.  (42|,  45,  46,  42,  47)  Feather  Ticking 

The  box  and  goods  weigh  320  lb. 

Goods  ordered  of  Geo.  A.  Wright  &  Co.,  Brooklyn,  on  Nov.  17,  have 
been  delivered.  Form  38 ;  also  the  goods  ordered  of  Clinton  Mills, 
Syracuse,  on  Nov.  16,  Form  39. 

Deposit  the  check  on  hand ;  no  collection  charged. 
/ — Your  bank  informs  you  that  J.  N.  Smith  &  Co.  have  paid  their  note 
which  was  protested  on  Nov.  26,  the  interest  to  date,  $5.33,  and  the 
notary  fees,  $1. 

—-An  the  cashbook  credit  the  following :  Protested  Paper,  $500  ;  Interest, 
$5.33  ;  Protest  Fees,  $1. 

Have  the  amount  entered  in  the  pass  book.  Record  $506.33  as  a  deposit  in  the 
check  book. 

Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Before  closing  the  books  for  November  give  careful  attention  to  the  classifica- 
tion of  the  Merchandise  account  as  explained  on  page  274. 


274  BOOKKEEPING 

CLASSIFICATION^  OF  THE  MERCHANDISE  ACCOUNT 

In  small  lines  of  business  it  is  the  general  custom  to  enter  all  trans- 
actions with  merchandise  in  one  account,  the  Merchandise  account ;  but 
in  a  large  business  the  subdivision  of  this  account  is  important  as  a  means 
of  setting  forth  the  facts  regarding  the  different  transactions  with  the 
merchandise  bought,  sold,  or  exchanged. 

In  this  set,  three  accounts  are  opened  with  merchandise,  as  follows: 
Merchandise  General^  which,  as  an  open  account,  shows  the  merchandise 
inventory ;  Merchandise  Purchases^  which,  as  an  open  account,  shows  on 
the  debit  side  all  goods  bought,  and  the  freight  and  drayage,  and  on  the 
credit  side  all  discounts  allowed  and  all  goods  returned,  if  any ;  Mer- 
chandise Sales,  which,  as  an  open  account,  shows  on  the  credit  side  all 
goods  sold,  and  on  the  debit  side  all  discounts  allowed  and  all  goods 
returned,  if  any. 

The  manner  of  posting  to  these  accounts  is  explained  in  Closing  the  Work  for 
November. 

The  closing  of  these  accounts,  when  the  books  are  closed  on  Dec.  6,  is  illustrated 
on  page  292. 

Closing  the  Work  for  November 

1.  Balance  the  cashbook  and  post  the  totals  to  the  general  ledger. 

Note.  The  footing  of  the  Merchandise  Discount  columns  is  closed  under  the  names 
Merclmndise  Sales  Dr.,  and  Merchandise  Purchases  Cr.,  and  posted  to  those  accounts  in 
the  general  ledger. 

2.  Rule  and  foot  the  sales  book.  The  following  is  the  closing  entry: 
Accounts  Receivable  to  Merchandise  Sales.  Post  these  items  to  the 
general  ledger. 

3.  Rule  and  foot  the  invoice  book.  The  following  is  the  closing 
entry :  Merchandise  Purchases  to  Accounts  Payable.  Post  these  items  to 
the  general  ledger. 

4.  Rule  and  foot  the  journal ;  make  the  proper  entry  for  the  total  of  the 
Purchase  Ledger  column  and  Sales  Ledger  column.  Post  to  the  general 
ledger. 

5.  Prove  the  bill  book. 

6.  Make  an  abstract  of  the  sales  ledger  and  have  it  approved. 

7.  Make  an  abstract  of  the  purchase  ledger  and  have  it  approved. 

8.  Take  a  trial  balance  of  the  general  ledger  and  have  it  approved. 

9.  Compare  the  monthly  bank  statement  with  the  check  book. 
10.  Hand  all  books  to  the  instructor  for  approval. 


REVIEW  EXERCISES 


275 


EXERCISE  63       ) 


A  Written  Review 


1.  INIake  the  statements  and  the  proof  from  the  following  trial  balance 


John  Hughes,  Prop. 

$12000. 

Harrison  F.  Lee,  Prop.          ^ 

6000. 

Samuel  S.  Farmer,  Prop. 

6000. 

Cash,  in  safe 

$248.80 

Deposit,  2d  National  Bank 

2537.32 

Expense 

974.30 

Salaries 

846.98 

Real  Estate 

7325. 

Chattels 

250. 

Office  Fixtures 

725. 

Horse  and  Wagon 

410. 

Loss  and  Gain 

377.80 

H.  &  F.  Ry.  Stock 

2000. 

M.  &  D.  Ry.  Stock 

1200. 

Interest 

89.45 

Merchandise  General 

8835.65 

Merchandise  Purchases 

2125.50 

Merchandise  Sales 

8495.40 

Bills  Receivable 

2169.90 

Bills  Payable 

1545.20 

Accounts  Receivable 

6400. 

Accounts  Payable 

1880.40 

John  Hughes,  Priv. 

155.20 

Harrison  F.  Lee,  Priv. 

78.35 

Samuel  S.  Farmer,  Priv. 

84.05 

$36377.15 

$36377.15 

Inventories  : 

Resource 

Liability 

Merchandise 

$4978.50 

$37.60 

Expense 

125. 

9.60 

Salaries 

50. 

Real  Estate 

7200. 

Chattels 

150. 

Office  Fixtures 

710. 

Horse  and  Wagon 

400. 

Interest 

26.50 

13.50 

20  shares  H.  &  F.  Ry.  Stock  at  98^ 

12  shares  M.  &  D.  Ry.  Stock  at  100 

276  BOOKKEEPING 

2.  Enter  all  the  accounts  in  the  trial  balance  on  ledger  paper,  four 
accounts  to  the  page,  and  close  the  ledger.  In  the  Loss  and  Gain 
account,  distribute  the  net  gain  according  to  the  investment  of  each 
partner;  carry  the  net  gain  to  the  private  accounts. 

Incoming  Business  Forms  for  December 

Form  40.  Invoice  of  Ogden  Mills,  Akron,  dated  Nov.  29.    Terms:   2/10, 
net  30  da.    Items  as  follows : 

10  pc.  (57^,  52,  49,  48,  46,  53^,  51,  56,  50^,  51)  Am.  Black  Dress  Silk 
10  pc.  (52,  49,  52,  47,  56^,  51,  54^,  53,  57^,  59)  Amazon  Cloth 
10  pc.  (52,  50,  46^,  471,  48,  52,  51,  50f ,  54,  51)  B.  E.  Camel's  Hair 
10  pc.  (52,  48,  46|,  47,  49,  61,  58,  53,  56^,  54)  B.  W.  Crepon 
100  doz.  spools  Corticelli  Silk 
10  pc.  (54^,  53,  57,  56,  50,  48,  47,  49,  52i ,  54)  Fancy  Plaids 
10  pc.  Velvet  Bibbon 

Form  41.  Check  of  B.  N.  Acker,  Byron,  dated  Nov.  29,  drawn  on  Traders 

National  Bank,  in  favor  of  your  firm,  for  $403.14. 
Form  42.  Sight   draft   of   Earl  &   Sampson,   Hopewell,   dated  Nov.  29, 

drawn  on  Williams,  Seamans  &  Co.,  City,  in  favor  of  your 

firm,  for  |29.45. 
Form  43.  Draft  of  Traders  National  Bank,  Rochester,  on  Chemical  National 

Bank,  New  York,  dated  Nov.  29,  drawn  in  favor  of  Jas.  B. 

Stillman,  and  transferred  by  him  to  your  firm  by  full  indorse- 
ment, for  163.47,  C.  C.  Canan,  Cashier. 
Form  44.  Draft  of  The  Union  Bank,  City,  on  Chemical  National  Bank, 

New  York,  dated  Dec.  1,  drawn  in  favor  of  your  firm,  for 

$718.27,  W.  B.  Frey,  Cashier. 
Form  45.  Check  of  H.  A.  McDowell  &  Co.,  City,  dated  Dec.  2,  drawn  on  ■ 

Traders  National  Bank,  in  favor  of  your  firm,  for  $150. 
Form  46.  Bill  of  Myers,  Teeter  &  Co.  Savannah,  dated  Nov.  29.    Terms; 

cash.    Items  as  follows : 

5  M  28-lb.  M.  Envelopes  at  $1.25  1  M  R.  B.  Envelopes  at  $2 

25  lb.  ^  Billheads  at  12^(^  25  lb.  Statement  Blanks  at  140 

10  lb.  Blotting  Paper  at  80  5  rm.  L.  T.  Paper  at  $1.75 

Form  47.  Check  of  Gardiner  &  Sprong,  Rush,  dated  Dec.  1,  drawn  oi 
Traders  National  Bank,  in  favor  of  your  firm,  for  $1155.67^ 

Form  48.  Invoice  of  Houghton,  Dutton  &  Co,  Chicago,  dated  Dec. 
Terms :  2/15,  net  60  da.    Items  as  follows : 

50  pc.  Fancy  Black  Ribbon  60  pc.  Duchesse  Lace 

50  pc.  Black  Chantilly  Lace  125  pc.  Velvet  Ribbon 


SET  VII.   DRY  GOODS  277 

Form  49.  Check  of  Benj.  Tracy  &  Co.,  City,  dated  Dec.  3,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  |781.21. 

Form  50.  Invoice  of  McDowell,  Cook  &  Co.,  Trenton,  dated  Dec.  2. 
Terms:  2/10,  net  60  da.    Items  as  follows: 

10  pc.  (47^,  45,  50,  51,  52^,  56,  54,  51,  56,  50|)  Wamsutta  Cotton 
10  pc.  (47,  46,  52,  40,  42,  41,  40,  42,  42i,  40)  Wash  Silk 
10  pc.  (42i,  46,  52,  47,  55,  31,  52,  47,  51i,  50)  V.  C.  Cloth 
10  pc.  (42,  50,  47,  50,  51,  52,  46,  52,  41,  50)  Taffeta  Silk 

7  pc.  (48,  52,  57,  54,  56,  51,  503)  Striped  Denim 

7  pc.  (47,  52,  49^,  47,  52,  46,  42)  Scotch  Cheviot 

Form  51.  Sight  draft  of  Chas.  H.  Dean  &  Co.,  Northampton,  dated  Dec.  3, 

drawn  on  N.  P.  Pond,  City,  in  favor  of  your  firm,  for  $29.32. 
Form  52.  Check  of  W.  F.  Pratt,  Utica,  dated  Dec.  8,  drawn  on  Traders 

National  Bank,  in  favor  of  your  firm,  for  $321.57. 
Form  53.  Check  of  Knowlton  &  Beach,  Rome,  dated  Dec.  8,  drawn  on 

Traders  National  Bank,  in  favor  of  your  firm,  for  |250. 
Form  54.  Check  of  J.  V.  Richardson  &  Co.,  Earlville,  dated  Dec.  8,  drawn 

on  Traders  National  Bank,  in  favor  of  your  firm,  for  $850. 
Form  55.  Note  of  Berriman  &  Co.,  Syracuse,  dated  Dec.  1,  drawn  at  30  da., 

with  interest  at  6%,  in  favor  of  your  firm,  for  $421.94. 
Form  56.  Invoice  of  Jordan,  Marsh  &  Co.,  Boston,  dated  Dec.  4.   Terms : 

8/10,  net  60  da.    Items  as  follows : 

25  pc.  (42,  41,  46,  52,  41,  50,  52,  48,  40,  41,  40,  50,  51,  52,  46,  42,  41i, 
48,  52,  40,  42,  47^,  48,  49,  51)  Barjeon  Cashmere 

10  pc.  (47 1 ,  50,  52,  61,  62,  48,  53,  57,  49,  54)  Amazon  Cloth 

25  pc.  (47^,  48,  52,  49,  51,  48,  52,  49,  50-1,  52,  56,  52,  47,  50,  50i,  49, 
52|,  51^,  521,  56,  52,  56,  49,  42,  41)  Black  Wool  Crepon 

25  pc.  (47^,  49,  51,  48^,  47,  50,  41,  46,  52,  47i,  46,  52i,  56,  40,  41,  43, 
46,  44,  481,  49,  52,  52,  47,  48,  50^)  Fancy  Wool  Cheviot 

Form  57.  Draft  of  Traders  National  Bank,  Auburn,  dated  Dec.  4,  drawn 
on  Chemical  National  Bank,  New  York,  in  favor  of  Hender- 
son &  Everett,  and  transferred  by  them  to  your  firm  by  full 
indorsement,  $805.53,  C.  E.  Denison,  Cashier. 

Form  58.  Sight  draft  of  Eaton  &  Co.,  Williamson,  dated  Dec.  4,  drawn 
on  F.  M.  Everett,  City,  in  favor  of  your  firm,  for  $24.17. 

Form  59.  Check  of  F.  O.  Saunders,  Sodus,  dated  Dec.  4,  drawn  on  Traders 
National  Bank,  in  favor  of  your  firm,  for  $279.97. 

Form  60.  Draft  of  Traders  National  Bank,  Albany,  dated  Dec.  4,  drawn 
on  Chemical  National  Bank,  New  York,  in  favor  of  Harlan  & 
Wilson,  and  transferred  by  them  to  your  firm  by  full  indorse- 
ment, $786.23,  D.  O.  Morehouse,  Cashier. 


278  BOOKKEEPING 

Form  61.  Sight  draft  of  F.  R.  Stearns  &  Co.,  Boston,  dated  Dec.  4,  drawn 
on  your  firm,  in  favor  of  themselves,  for  |500 ;  indorsed  by 
F.  R.  Stearns  &  Co.  to  Commercial  Bank,  Boston,  and  by 
Commercial  Bank  to  The  Union  Bank,  City. 

Form  62.  Invoice  of  R.  W.  White  &  Co.,  New  York,  dated  Dec.  5. 
Terms:   3/15,  net  60  da.    Items  as  follows : 

10  pc.  (47^,  45,  56,  52,  49,  51,  52,  47,  49,  50)  Am.  Black  Dress  Silk 
10  pc.  (421,  43,  44,  411,  46,  47,  49,  52,  44,  43)  Bengaline  Silk 
10  pc.  (421,  46,  44,  42i,  45,  46,  45,  45,  50,  50)  B.  E.  Camel's  Hair 
12  pc.  (44,  41,  42,  39,  62,  47,  52,  41,  46,  54,  61,  52^)  Feather  Ticking 
12  pc.  (421,  47,  43,  45,  52,  57^,  59,  56,  54i,  54^,  50,  48)  S.  Denim 

5  doz.  Men's  Balbriggan  Half  Hose 
10  pc.  Marquise  Lace 

Form  63.  Draft  of  Traders  National  Bank,  Lynn,  dated  Dec.  4,  drawn 
on  Chemical  National  Bank,  New  York,  in  favor  of  Ellis  & 
Farmer,  and  transferred  by  them  to  your  firm,  for  |683.57, 
F.  O.  Simpson,  Cashier. 

Form  64.  Bill  of  the  Citizens  Carting  Co.,  City,  dated  Dec.  6.  Terms : 
cash.    Items  as  follows : 

Dec.  1,  Cartage,  |3.75 ;  Freight,  $47.50 

2,  Cartage,    1.50 

3,  Cartage,    2.50 

4,  Cartage,    3.00 ;  Freight,    27.56 

5,  Cartage,    4.00 ;  Freight,    32.05 

6,  Cartage,    1.00 

Form  65.  Check  of  D.  E.  Mosher,  Tonawanda,  dated  Dec.  5,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $150. 

Form  66.  Invoice  of  Macy,  Cooper  &  Co.,  New  York,  dated  Dec.  5. 
Terms :   3/10,  net  30  da.    Items  as  follows : 

100  gro.  Bone  Buttons  100  gro.  Gilt  Buttons 

100  gro.  Jet  Buttons  25  doz.  Whalebones 

Form  67.  Draft  of  Traders  National  Bank,  Rush,  on  Chemical  National 
Bank,  New  York,  dated  Dec.  4,  payable  to  Gardiner  &  Sprong, 
and  transferred  by  them  to  your  firm  by  full  indorsement,  for 
$1006.53,  C.  O.  Moran,  Cashier. 

Form  68.  Draft  of  Traders  National  Bank,  Savannah,  on  Chemical  National 
Bank,  New  York,  dated  Dec.  5,  payable  to  Fred  S.  Goodwin, 
indorsed  to  your  firm  for  $1110.89,  D.  D.  Sprague,  Cashier. 

Form  69.  Check  of  Benj.  Tracy  &  Co.,  City,  dated  Dec.  6,  drawn  on 
Traders  National  Bank,  in  favor  of  your  firm,  for  $1244.38. 


SET  VII.   DRY  GOODS  279 

Monday,  Dec.  1 

Draft  in  favor  of  Jordan,  Marsh  &  Co.,  made  payable  at  The  Union 
Bank,  was  due  yesterday  (Sunday). 
Issue  a  check  in  payment. 

The  bank  also  notifies  you  that  the  note  of  Jaggard  &  Co.  has  been 
credited  to  your  account,  less  75(^  collection. 

A  note  in  favor  of  Jones  Manufacturing  Co.  was  due  yesterday,  payable 
at  The  Union  Bank. 

Issue  a  check  in  payment. 

The  Citizens  Carting  Co.  has  delivered  to  you  the  goods  ordered  of 
Ogden  Mills  on  Nov.  26,  Form  40. 

Receive  of  B.  N.  Acker,  Byron,  a  check  for  the  invoice  of  Nov.  29, 
less  2%,  Form  41. 

Wm.  J.  Tenhy  has  resumed  his  work  in  eastern  New  Yo\'k  after  a 
vacation  of  two  weeks.    He  sends  you  the  following  orders : 

1.  Harlan  &  Wilson,  Albany : 

5  pc.  (45^,  40,  47,  52,  67)  American  Black  Dress  Silk 

8  pc.  (47,  52,  613,  49,  63,  49,  59,  61)  Black  Wool  Lansdowne 
12  doz.  Boys'  Heavy  Cotton  Hose 

12  doz.  Ladies'  Cashmere  Hose 

9  pc.  Marquise  Lace 

8  pc.  (49,  52,  54,  52|,  57^,  56,  49,  61|)  Percale  Shirting 
12  doz.  spools  Thompson  Thread 

9  doz.  Whalebones 

3  pc.  (47,  45,  42)  Wash  Silk 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  420  lb. 

2.  W.  F.  Pratt,  Utica: 

6  pc.  (49,  51|,  54,  56,  61,  68)  Gunner's  Duck 
25  pc.  Grosgrain  Ribbon 

7  gro.  Jet  Buttons 
3  gro.  Gilt  Buttons 

8  pc.  (52,  47,  48^,  45 J,  47|,  49,  47^,  49J)  Scotch  Cheviot 
3  pc.  (47^,  49|,  50^)  Simpson  Mourning  Print 

Fill  the  order.    Terms:   2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  320  lb. 

Send  Wm.  J.  Tenny,  at  Albany,  a  check  for  traveling  expenses,  $100. 

In  your  letter  ask  him  to  visit,  as  soon  as  possible,  Hall,  Balliet  &  Co.,  Springfield, 

from  whom  you  received  an  inquiry  this  morning.    Give  some  general  instructions. 


280  BOOKKEEPING 


SOME  THINGS  THAT  CONTRIBUTE  TO  A  GOOD  BUSINESS  LETTER 

1.  The  use  of  good  materials,  especially  stationery. 

2.  Good  mechanical  form,  such  as  sufficient  margins  and  correct  paragraphing. 

3.  The  use  of  good  English,  —  short,  concise  sentences;  correct  spelling;  right 
capitalization ;  careful  punctuation. 

4.  Completeness  in  all  statements. 

5.  In  perplexing  business  letters,  the  general  tone  is  of  the  greatest  importance. 
One  should  aim  to  express 

a.  Sincerity 

b.  Frankness 

c.  Fairness 

6.  Use  a  complimentary  close  consistent  with  the  salutation. 

The  business  letter  is  the  expression  of  the  firm  that  sends  it,  and  it  should,  as 
far  as  possible,  create  a  feeling  of  good  will  and  confidence. 

Receive  of  Earl  &  Sampson,  Hopewell,  a  sight  draft  on  Williams, 
Seaman  &  Co.,  City,  in  favor  of  your  firm,  to  apply  on  account,  for 
$29.45,  Form  42. 

Treat  the  draft  as  cash  and  place  it  in  the  Business  Cash  envelope. 

Receive  of  James  B.  Stillman,  Rochester,  a  New  York  draft  in  full  for 
the  invoice  of  Nov.  27,  less  2%,  Form  43. 
He  orders  the  following  goods : 

5  pc.  (45,  47,  52,  51,  47|)  American  Black  Dress  Silk 

6  pc.  (49,  51,  56,  52,  62i,  67)  Amazon  Cloth 
10  doz.  spools  Corticelli  Silk 

2  pc.  (471,  49)  Fancy  Plaids 

Fill  the  order.    Terms :  2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  225  lb. 

Remit  C.  O.  Bond  &  Co.,  Philadelphia,  a  New  York  draft  for  the 
balance  due  on  the  invoice  of  Nov.  22,  less  2%,  Form  44.  Buy  the  draft 
by  check.    The  bank  charges  500  for  exchange. 

Discount  at  The  Union  Bank  the  note  received  of  Green  &  Gregory, 
on  Nov.  20,  and  receive  credit  for  the  proceeds. 

Return  to  Geo.  A.  Wright  &  Co.,  Brooklyn,  the  20  pc.  Black  Chan- 
tilly  Lace  received  in  the  invoice  of  Nov.  28.  These  goods  are  returned, 
owing  to  a  misunderstanding  in  regard  to  the  quality. 

Compute  the  charge  at  the  price  named  in  the  invoice. 

Make  the  following  journal  entry :  Geo.  A.  Wright  &  Co.  (Purchase  Ledger  Debits) 
to  Mdse.  Purchases  (General  Ledger  Credits), 


SET  VIL   DRY  GOODS  281 

Deposit  the  New  York  draft,  the  sight  draft,  and  the  check  on  hand. 
Collection  on  the  check,  50(f. 

Make  out  a  daily  statement.    Post. 
Submit  all  books  to  the  instructor  for  approval. 

Tuesday,  Dec.  2 
Write  a  letter  to  R.  W.  White  &  Co.,  New  York,  ordering : 

10  pc.  Am.  B.  D.  Silk  12  pc.  Striped  Denim 

10  pc.  Bengaline  Silk  5  doz.  Men's  B.  Half  Hose 

12  pc.  Feather  Ticking  10  pc.  Marquise  Lace 

10  pc.  Black  English  Camel's  Hair 

Inclose  your  note  at  30  da.  for  $650,  to  apply  on  account. 
The  following  orders,  received  this  morning,  are  to  be  filled  in  the 
regular  way.    Terms :  2/10,  1/30,  net  60  da. 

1.  From  Knowlton  &  Beach,  Rome : 

10  pc.  (54,  52,  47|,  48,  56,  62,  50,  52^,  57,  59)  Bengaline  Silk 
4  pc.  (42J,  45,  46,  49)  Feather  Ticking 

4  doz.  Boys'  Heavy  Cotton  Hose 
9  doz.  Whalebones 

3  pc.  (47|,  49,  56)  Striped  Denim 

The  box  and  goods  weigh  320  lb. 

2.  From  Fred  S.  Goodwin,  Savannah : 

6  pc.  (47^,  49|,  47,  52,  60i,  64)  Black  English  Camel's  Hair 
12  doz.  Men's  Kid  Gloves 
12  doz.  Ladies'  Kid  Gloves 

5  pc.  (47^,  49,  51,  43|,  58)  American  Black  Dress  Silk 

The  box  and  goods  weigh  200  lb. 

Receive  of  H.  A.  McDowell  &  Co.,  City,  their  check,  in  payment  of 
the  draft  on  them  due  to-day,  $150,  Form  45. 

Stationery  manufactured  for  your  firm  by  Myers,  Teeter  &  Co.,  Savan- 
nah, has  been  received.  Form  46.  Draw  at  sight  on  Fred  S.  Goodwin, 
Savannah,  in  favor  of  Myers,  Teeter  &  Co.,  for  $24.43,  and  remit  the 
draft  to  them  in  settlement,  as  Goodwin  has  agreed  to  honor  the  draft. 

Enter  in  the  journal.    Charge  Expense. 

Draft  in  favor  of  C.  O.  Bond  &  Co.,  Philadelphia,  is  due  to-day,  payable 
at  The  Union  Bank. 
Issue  a  check  in  payment. 

Remit  R.  W.  White  &  Co.,  New  York,  a  check  in  payment  of  the 
invoice  of  Nov.  19,  less  3%. 


282  BOOKKEEPING 

Remit  Jordan,  Marsh  &  Co.,  Boston,  a  check,  in  payment  of  the 
invoice  of  Oct.  30,  $587.83. 

Receive  of  Gardiner  &  Sprong,  Rush,  a  check,  for  the  invoice  of 
Nov.  25,  less  2%,  Form  47. 

Deposit  the  two  checks  on  hand  and  |50  in  currency.  Collection 
charged  on  Gardiner  &  Sprong's  check,  -^^^o- 

Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Wednesday,  Dec.  3 

The  Citizens  Carting  Co.  has  delivered  to  your  firm  the  goods  ordered 
of  Houghton,  Dutton  &  Co.,  on  Nov.  27,  Form  48. 
— ^Traver,  Stillman  &  Co.,  Penfield,  order: 

8  pc.  (47^,  48,  49,  50,  52^,  58,  59,  60)  Gunner's  Duck 
10  pc.  Marquise  Lace 
15  pc.  Velvet  Ribbon 

7  pc.  Grosgrain  Ribbon 

5  pc.  (52,  57,  48|,  51,  50)  Wash  Silk 

7  pc.  (48^,  49,  51,  521,  57,  48,  49)  AVamsutta  Cotton 

3  pc.  (48^,  49,  50)  Percale  Shirting 

These  men  are  entire  strangers  to  you  and  instruct  you  to  ship  by 
freight,  subject  to  the  order  of  the  bank,  at  once,  as  they  are  in  need 
of  the  goods. 

Fill  the  order  as  they  suggest,  less  2%. 

Leave  the  draft  attached  to  the  bill  of  lading  with  The  Union  Bank  for  collection. 

The  box  and  goods  weigh  390  lb. 

As  investigations  regarding  this  firm  are  satisfactory,  write  a  letter,  thanking 
them  for  the  order  and  express  your  willingness  to  open  an  account  with  them  on 
your  regular  terms  :  2/10,  1/30,  net  60  da. 

Inclose  the  invoice  in  this  letter. 

Fill  the  following  order  of  Benj.  Tracy  &  Co.,  City.  Terms:  2/10, 
1/30,  net  60  da. 

5  pc.  (471  52i,  62,  60,  61)  Bengaline  Silk 

7  pc.  (47^,  41,  46,  42^,  47^,  45,  46)  Black  Wool  Crepon 

4  pc.  (47^,  51,  50,  52)  Black  Wool  Lansdowne 

3  pc.  (471  45,  41)  Barjeon  Cashmere 

4  doz.  Whalebones 

5  doz.  spools  Thompson  Thread 

They  inclose  with  the  above  order  a  check,  in  settlement  of  the  invoice 
of  Nov.  28,  less  2%,  Form  49. 


SET  VII.   DRY  GOODS  283 

Note  in  favor  of  D.  N.  Snow  &  Co.  is  due  to-day,  payable  at  The 
Union  Bank.    Face  of  note,  |3000  ;  interest  accrued,  |15. 
Issue  a  check  in  payment. 

Deposit  the  check  on  hand. 

Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Thursday,  Dec.  4 

Draw  from  the  bank  for  office  expenses,  by  a  cash  check,  $150. 
You  draw  one  half  month's  salary  in  cash,  |50. 
Charge  Salary  account  in  the  cashbook. 

Pay  Chas.  Denman  cash  for  cleaning  the  basement,  $4.50. 
Pay  for  sundry  repairs  about  the  store,  cash,  $5.50. 
Charge  Expense  for  the  above  items. 

Pay  for  letter  press  and  stand,  cash,  $10. 

Charge  Office  Fixtures. 

D.  A.  Delano,  Sodus,  writes,  asking  you  to  ship  him  by  express,  C.O.D. : 

15  doz.  Ladies'  Kid  Gloves  15  doz.  Men's  Kid  Gloves 

5  doz.  Ladies'  Cashmere  Hose 

Fill  the  order  as  he  suggests,  less  2%. 

The  Citizens  Carting  Co.  has  delivered  the  goods  ordered  of  McDowell, 
Cook  &  Co.,  on  Nov.  27,  Form  50. 

Receive  of  Chas.  H.  Dean  &  Co.,  Northampton,  a  sight  draft  on  N.  P. 
Pond,  City,  for  $29.32,  Form  51. 

Leave  the  draft  with  The  Union  Bank  for  collection. 

D.  O.  Mills  draws  cash  for  private  use,  $50. 
Place  the  currency  in  the  Personal  Cash  envelope. 

B.  E.  Valentine,  Rose,  writes  asking  you  to  ship  him  by  express,  C.O.D. : 

.3  pc.  (47^,  41,  451)  Am.  Black  Dress  Silk 
3  pc.  (45^,  411,  40)  Wash  Silk 
15  doz.  Boys'  Heavy  Cotton  Hose 
5  doz.  Ladies'  Cashmere  Hose 

Fill  the  order  as  he  suggests,  less  2%. 

Receive  of  W.  F.  Pratt,  Utica,  a  check,  in  payment  of  the  invoice  of 
Dec.  1,  less  .2%,  Form  52. 

Receive  of  Knowlton  &  Beach,  Rome,  a  check,  to  apply  on  account, 
for  $250,  Form  53. 


284  BOOKKEEPING 

Receive  of  J.  V.  Richardson  &  Co.,  Earlville,  a  check,  to  apply  on 
account,  for  $350,  Form  54.    They  order  the  following : 

7  pc.  (47|,  48,  52,  51|,  48,  53,  50^)  Am.  Black  Dress  Silk 

3  pc.  (491,  51,  48f )  Wamsutta  Cotton 

3  pc.  (471,  49,  42)  Black  Wool  Crepon 

6  pc.  (42,  47,  50,  51,  60,  47^)  Simpson  Mourning  Print 

5  doz.  spools  Thompson  Thread 

3  doz.  Whalebones 

3  pc.  Marquise  Lace 

3  pc.  Velvet  Ribbon 

2  pc.  (47,  49)  Striped  Denim 

2  pc.  (42^,  47)  Bengaline  Silk 

Fill  the  order.    Terms :  2/10,  1/30,  net  60  da. 

The  goods  are  shipped  in  two  boxes  weighing,  when  packed,  200  lb.  and  225  lb 
respectively. 

Your  bank  informs  you  that  the  sight  draft  on  N.  P.  Pond,  City,  left 
for  collection,  has  been  paid. 
Credit  Chas.  H.  Dean  &  Co. 

Deposit  the  checks  on  hand ;  collection,  $1.25. 
Make  out  a  daily  statement.    Post. 
Submit  all  books  to  the  instructor  for  approval. 

Friday,  Dec  5 

Receive  of  Berriman  &  Co.,  Syracuse,  their  note,  at  30  da.,  with  interest 
at  6%,  in  full  for  the  invoice  of  Nov.  24,  less  1%,  Form  55.  The  note 
is  dated  Dec.  1. 

Charge  the  discount  to  Merchandise  Sales. 

An  inquiry  has  been  received  from  Nester  &  Worden,  retail  dry-goods 
merchants,  Geneva,  relative  to  a  general  line  of  dry  goods.  They  refer 
you  to  sevv^ral  well-known  houses,  state  that  they  are  rated  by  Dun's 
and  Bradstreet's  agencies,  and  ask  you  to  quote  them  your  best  terms. 

An  investigation  of  their  financial  standing  by  your  firm  proves  the  desirability 
of  securing  this  firm  as  regular  customers,  and  you  write  them  a  courteous  letter, 
thanking  them  for  their  inquiry  and  soliciting  a  share  of  their  patronage.  Call  brief 
attention  to  your  general  facilities  for  doing  business,  and  try  to  make  them  feel 
that  it  would  be  to  their  advantage  to  enter  into  business  relations  with  your  firm. 

Have  the  letter  criticized  before  handing  it  in. 

Note.  Dun's  and  Bradstreet's  commercial  agencies  are  two  large  corporations  of  the. 
United  States  engaged  in  the  business  of  collecting  information  with  regard  to  the  finan- 
cial standing,  the  ability,  and  the  rating  of  persons  engaged  in  business  enterprises,  and 
sending  it  to  subscribers  to  their  service. 


I 


SET  VII.   DRY  GOODS  285 

These  two  agencies  have  become  extensive  factors  in  modern  commercial  transactions 
by  furnishing  information  to  retail  jobbers,  wholesale  merchants,  etc.  The  prudent 
business  man  before  selling  to  a  stranger  on  credit  should  inform  himself  first,  through 
these  commercial  agencies,  of  the  financial  standing  of  the  prospective  customer. 


SUGGESTIONS  BEARING  UPON  LETTERS  SOLICITING  TRADE 

A  very  fruitful  source  of  new  business  is  the  letter  soliciting  trade ;  and  since  no 
accomplishment  is  of  more  importance  to  the  business  man  than  that  of  securing 
trade,  all  these  letters  should  be  handled  diplomatically.  The  following  points  should 
receive  consideration  in  the  writing  of  such  a  letter. 

1.  Follow  up  inquiries  promptly  and  tactfully. 

2.  If  you  are  not  satisfied  with  the  references  given  you,  be  careful  how  you  say  so. 

3.  Do  not  hesitate  to  show  your  unwillingness  to  fill  orders  when  references  are 
unsatisfactory. 

4.  Avoid  all  extravagant  claims  for  goods  and  facilities  for  doing  business. 

5.  Use  good  materials  and  write  an  attractive  letter.  The  letters  sent  out,  in 
most  cases,  stamp  pretty  accurately  the  kind  of  a  house  they  represent. 

6.  Do  not  beg  for  trade. 

7.  Be  brief.  In  letters  similar  to  the  foregoing,  especially,  do  not  say  too  much. 
Business  men  are  not  likely  even  to  read  long  circular  letters. 

Goods  ordered  of  Jordan,  Marsh  &  Co.,  on  Nov.  28,  have  been  delivered 
by  the  Citizens  Carting  Co.,  Form  56. 

You  ship  Sumner  Bros.,  Union  Springs,  as  per  their  instructions  in  a 
letter  received  this  morning,  the  following  goods  by  freight,  subject  to 
Ae  order  of  the  bank. 

12  pc.  Black  Chantilly  Lace 

4  pc.  (421,  42,  45|,  47)  Bengaline  Silk 

7  pc.  (421,  471,  51,  50,  52J,  53,  54)  Cotton  Surah  Lining 

3  pc.  (471,  41|,  49)  Fancy  Plaids 

3  gro.  Gilt  Buttons 
10  pc.  (47^,  49,  41,  47,  45,  52,  61i,  59|,  57^,  51^)  Feather  Ticking 

2  gro.  Bone  Buttons 

2  doz.  spools  Corticelli  Silk 

3  pc.  (47|,  48,  45)  Fine  English  Serge 

You  allow  them  a  2%  discount  on  the  bill. 

Handle  this  order  in  the  usual  way.  Write  a  letter,  quoting  your  regular  terms, 
and  inclose  the  invoice. 

These  goods  are  shipped  in  two  boxes,  weighing,  when  packed,  200  lb.  and  250  lb. 
respectively. 

J.  V.  Richardson  &  Co.,  Earlville,  return  the  following  goods,  from 
the  invoice  sent  to  them  on  Dec.  4,  owing  to  a  slight  damage  in  shipment : 

3  pc.  Marquise  Lace  3  pc.  Velvet  Eibbon 


286  BOOKKEEPING 

Compute  the  credit  at  the  prices  named  in  the  invoice. 

Make  the  following  journal  entry  :  Mdse.  Sales  (General  Ledger  Debits)  to  J.  V. 
Richardson  &  Co.  (Sales  Ledger  Credits). 

Henderson  &  Everett,  Auburn,  to  whom  you  quoted  prices  and  terms 
Nov.  17,  have  sent  the  following  order: 

3  pc.  (521,  533^  50)  American  Black  Dress  Silk 

2  pc.  (47,  43)  Amazon  Cloth 

2  pc.  (471,  42)  Black  English  Camel's  Hair 

2  pc.  (47  J,  45)  Fancy  Wool  Cheviot 
5  doz.  Men's  Kid  Gloves 

10  doz.  pc.  Linen  Torchon  Lace 
10  doz.  spools  Thompson  Thread 

3  pc.  (521,  57,  52)  Venetian  Crape  Cloth 

They  inclose  a  New  York  draft,  in  payment  of  the  above  bill,  less  2%, 
Form  57. 

Check  the  entry  in  each  book. 
The  box  and  goods  weigh  190  lb. 

The  following  orders,  received  in  this  morning's  mail,  are  to  be  filled 
in  the  regular  way.    Terms:  2/10,  1/30,  net  60  da. 

1.  Chas.  H.  Dean  &  Co.,  Northampton : 

10  pc.  Fancy  Black  Kibbon 
3  pc.  (47|,  41,  49)  Fancy  Gingham  # 

5  pc.  Marquise  Lace 

7  pc.  (47^,  41,  49,  52,  51|,  57,  56)  Scotch  Cheviot 
3  pc.  (47^,  41,  49)  Simpson  Mourning  Print 
7  gro.  Jet  Buttons 
3  pc.  Grosgrain  Ribbon 
5  doz.  spools  Thompson  Thread 
5  doz.  spools  Corticelli  Silk 
3  pc.  (47|,  49,  52)  Striped  Denim 
3  doz.  Whalebones 

The  box  and  goods  weigh  250  lb. 

2.  Eaton  &  Co.,  Williamson  : 

7  pc.  (47^,  41,  40,  43,  45,  47^,  48)  Fancy  Boucle  Stripe 

3  doz.  spools  Corticelli  Silk 

4  gro.  Bone  Buttons 

10  pc.  (521,  47^,  52,  51,  53i,  50,  54,  56,  59,  60^)  Fancy  Gingham 
10  pc.  (521,  471,  52,  51,  53J,  50,  49,  56,  58,  59)  Cotton  Surah  Lining 

7  doz.  Ladies'  Cashmere  Hose 

7  doz.  Boys'  Heavy  Cotton  Hose 


SET  VII.   DRY  GOODS  287 

These  goods  are  shipped  in  two  boxes  weighing,  when  packed,  220  lb.  and  210  lb. 
respectively. 

Eaton  &  Co.  inclose  a  sight  draft  on  F.  M.  Everett,  City,  to  apply  on 
account,  for  |24.17,  Form  58. 

Enter  the  draft  in  the  cashbook,  as  Everett  has  agreed  to  pay  it  on  presen- 
tation. 

Receive  of  F.  O.  Saunders,  Sodus,  a  check,  in  payment  of  the  invoice 
of  Nov.  29,  less  2%,  Form  59. 

Remit  Houghton,  Button  &  Co.,  by  check,  in  full  for  the  invoice  of 
Dec.  1,  less  2%. 

Your  firm  wishes  to  engage  the  services  of  a  competent  and  experi- 
enced stenographer,  and  Mr.  Morley  has  asked  you  to  prepare  an 
advertisement  to  be  inserted  in  the  Daily  Morning  Transcript. 

Write  the  advertisement,  stating  the  qualifications  necessary  for  a  candidate  who 
applies  for  the  position. 

Fay  for  the  advertisement  in  cash,  50(^. 

Receive  of  Harlan  &  Wilson,  Albany,  a  New  York  draft,  in  payment 
of  the  invoice  of  Dec.  1,  less  2%*  Form  60.    In  their  letter  they  order: 

25  doz.  Men's  Kid  Gloves  25  doz.  Ladies'  Kid  Gloves 

Fill  the  order.    Terms:  2/10,  1/30,  net  60  da. 
Remit  Ogden  Mills  a  check  for  the  invoice  of  Nov.  29,  less  2%. 
Pay  by  check  a  sight  draft  of  F.  R.  Stearns  &  Co.,  Boston,  on  your 
firm,  in  favor  of  themselves,  for  $500,  Form  61. 

"Write  the  check  in  favor  of  your  bankers,  who  presented  the  draft  for  collection. 

Deposit  the  two  New  York  drafts,  the  check,  and  the  sight  draft  on 
hand;  collection  on  check,  ^^0%. 
Make  out  a  daily  statement.    Post. 

Submit  all  books  to  the  instructor  for  approval. 

Saturday,  Dec.  6 

The  balance  due  on  the  account  of  Baker,  Shaw  &  Co.,  Clifton  Springs, 
is  over  60  da.  past  due.  At  maturity  of  their  bills  a  statement  of  account 
was  sent  them.  No  attention  was  paid  to  this,  and  on  Nov.  1  Mr.  Morley 
wrote  them  a  mild  dunning  letter,  calling  attention  to  their  overdue 
balance  and  urging  a  prompt  settlement.  Nov.  8  a  letter  was  received 
from  them,  stating  their  inability  to  pay  then,  but  making  a  definite 
promise  to  settle  in  full  by  Nov.  25.    No  word  has  been  received  from 


288  BOOKKEEPING 

them  since.  At  Mr.  Morley's  suggestion  you  write  a  letter,  asking  for 
an  immediate  settlement  of  the  account.  These  points  are  set  forth  in 
your  letter : 

1.  The  firm  has  the  ability  to  pay  its  debts,  you  think. 

2.  You  want  to  continue  to  do  business  with  them. 

3.  You  must  have  a  settlement  at  once. 

SUGGESTIONS  BEARING  UPON  DUNNING  LETTERS 

1.  Promptness  and  accuracy  in  the  matter  of  sending  statements  and  other 
reminders  of  overdue  accounts  are  of  the  greatest  importance  in  securing  prompt 
settlements. 

2.  When  no  attention  is  paid  to  statements  of  account,  dunning  letters  generally 
follow.    How  soon  they  should  follow  depends  upon  circumstances. 

3.  The  tone  of  a  dunning  letter  should  be  governed  by  existing  conditions.  No 
dunning  letter  should 

a.  Lack  in  courtesy. 

b.  Contain  accusations  of  any  sort. 

c.  Show  that  the  temper  of  the  writer  is  overwrought. 

,  (L  Intimate  court  proceedings  unless  that  seems  to  be  the  last  resort. 

4.  Dunning  letters  should 
a.  Aim  to  make  the  tone  of  the  appeal  consistent  with  the  facts  of  the  case. 

For  instance,  the  first  of  a  series  of  dunning  letters  should  be  entirely 
different  in  tone  from  the  second  or  the  third  letter. 
&.  Be  brief  and  to  the  point 

c.  As  far  as  possible  show  that  the  writer  has  confidence  in  his  debtor  and 

expects  a  prompt  payment. 

d.  Make  proper  reference  to  the  amount  of  the  account. 

e.  Be  fair  and,  as  far  as.  consistent  with  good  business  management,  lenient. 

f.  Avoid  the  imperative  form  of  statement. 

Goods  ordered  of  R.  W.  White  &  Co.,  New  York,  on  Dec.  2  have 
been  delivered  by  the  Citizens  Carting  Co.,  Form  62. 

Ellis  &  Farmer,  Lynn,  write,  inclosing  a  New  York  draft.  Form  63,  in 
settlement  for  the  following  goods,  which  they  wish  sent  at  once  : 

7  pc.  (57,  52,  51,  52,  50,  52|,  52)  Fancy  Gingham 

7  pc.  (47,  49,  50,  42,  44,  53,  48)  Fine  English  Serge 

8  pc.  (47,  48,  47,  42,  46,  42i,  43|,  42)  Fancy  Plaids 
5  doz.  spools  Corticelli  Silk 

Fill  the  order.    Terms:  cash,  less  2%. 
The  box  and  goods  weigh  420  lb. 

Discount  at  The  Union  Bank  the  note  received  of  Berriman  &  Co.  on 
Dec.  5,  and  receive  credit  for  the  proceeds. 
Remember  that  the  note  bears  interest. 


SET  VII.   DRY  GOODS  289 

Your  bank  informs  you  that  the  sight  draft  attached  to  the  bill  of 
lading  on  Dec.  3  has  been  collected ;  collection,  J^-%  of  the  draft.  Also 
that  the  note  of  S.  C.  Williams,  left  for  collection  Nov.  18,  has  been 
paid,  and  that  the  amount,  less  |1  for  collection,  has  been  placed  to 
your  credit. 

Pay  by  check  the  bill  of  the  Citizens  Carting  Co.,  $122.86,  Form  64. 

Charge  this  to  Merchandise  Purchases  account. 

D.  E.  Mosher,  Tonawanda,  orders : 

3  doz.  Boys'  Heavy  Cotton  Hose 

2  pc.  (47,  50)  Cotton  Surah  Lining 
5  pc.  Marquise  Lace 

3  pc.  (47^,  45,  41)  Venetian  Crape  Cloth 
5  pc.  Velvet  Ribbon 

3  pc.  (42,  47,  45)  Wamsutta  Cotton 

3  doz.  Whalebones 

2  doz.  Ladies'  Kid  Gloves 

Fill  the  order.    Terras:   2/10,  1/30,  net  60  da. 
The  box  and  goods  weigh  140  lb. 

In  the  above  letter  was  a  check  on  Traders  National  Bank,  to  apply 
on  account,  for  $150,  Form  65. 

Goods  ordered  of  Macy,  Cooper  &  Co.,  New  York,  on  Nov.  16,  to  be 
delivered  not  later  than  Dec.  10,  have  been  received.  Form  QQ. 

Remit  Jordan,  Marsh  &  Co.,  Boston,  a  check,  in  payment  of  the  invoice 
of  Dec.  4,  less  3%. 

Receive  the  following  remittances  on  account : 

1.  Of  Gardiner  &  Sprong,  a  New  York  draft,  in  full  of  account,  less 
1%,  Form  67. 

2.  Of  Fred  S.  Goodwin,  Savannah,  a  New  York  draft,  in  payment  of 
the  invoice  of  Dec.  2,  less  2%,  Form  68. 

3.  Of  Benj.  Tracy  &  Co.,  City,  a  check,  in  payment  of  the  invoice  of 
Dec.  3,  less  2%,  Form  69. 

Draw  a  cash  check  for  office  expenses,  |50. 
Pay  salaries  for  the  week  in  cash,  |135. 

Deposit  the  two  checks,  the  three  New  York  drafts,  and  all  the  cur- 
rency on  hand.    No  collection  charged. 
Make  out  a  daily  statement.    Post. 
Submit  all  books  to  the  instructor  for  approval. 


290  BOOKKEEPING 

Closing  the  Work  for  December 

1.  Make  a  journal  entry  to  adjust  the  interest  on  the  proprietors' 
accounts.  (See  explanation,  page  242.)  Take  into  consideration  the 
following : 

a.  Interest  was  last  adjusted  Nov.  15. 

h.  Morley's  share  of  the  capital  stock  is  $20,000 ;  Mills's  share, 
118,750 ;  these  sums  draw  interest  from  Nov.  15  to  date.  (Count  the 
exact  number  of  days.) 

c.  The  credit  of  Morley's  private  account  draws  interest  from  Nov.  15 
to  date ;  also,  the  credit  of  Mills's  private  account  draws  interest  from 
Nov.  15  to  date. 

d.  The  withdrawals  on  each  personal  account  are  charged  with  interest 
from  the  date  of  withdrawal  to  Dec.  6. 

e.  According  to  the  articles  of  agreement,  the  gains  and  the  losses  are 
to  be  shared  equally. 

Outline  the  entry  on  paper  for  the  above  adjustment  of  interest,  and  have  it 
approved  by  the  instructor  before  you  make  it  in  your  books. 

2.  Post  the  above  entry.  Rule  and  foot  the  journal  and  make  the 
proper  entry  for  the  totals.    Post  the  entry  to  the  general  ledger. 

Note.  Before  closing  the  cashbook,  the  sales  book,  and  the  purchase  book,  refer  to 
the  instructions  given  for  closing  the  work  in  November,  page  274. 

3.  Balance  the  cashbook  and  post  the  items  in  the  summary. 

4.  Rule  and  foot  the  sales  book  and  make  the  proper  entry  for  the 
total.    Post  the  entry  to  the  general  ledger. 

5.  Rule  and  foot  the  invoice  book  and  make  the  proper  entry  for  the 
total.    Post  the  entry  to  the  general  ledger. 

6.  Prove  the  bill  book. 

7.  Make  an  abstract  of  the  sales  ledger  and  have  it  approved. 

8.  Make  an  abstract  of  the  purchase  ledger  and  have  it  approved. 

9.  Make  a  trial  balance  from  the  general  ledger  and  have  it  approved. 

To  THE  Student.  If  the  trial  balance  and  abstracts  do  not  prove,  look  for  tlie  errors 
systematically.  Never  verify  portions  of  the  work  at  random  and  expect  to  locate  the 
discrepancies.  Be  sure  that  errors  actually  exist  before  you  begin  to  look  for  them. 
Revise  the  additions  of  the  trial  balance  and  abstracts  before  looking  for  the  error  in  the 
ledger  or  other  books.  Find  the  exact  amount  of  the  discrepancy  and  see  if  the  sum  is 
not  some  footing  which  has  been  improperly  forwarded  or  posted,  or  the  posting  of  this 
footing  may  have  been  omitted.  Errors  of  one  figure  are  usually  mistakes  in  addition. 
Verify  the  additions  of  the  ledgers  and  the  various  books  from  which  totals  are  posted. 
If  dollars  have  been  written  as  cents,  or  vice  versa,  dividing  the  difference  by  9,  99,  or 
999  respectively  will  indicate  a  figure  which  has  been  misplaced  one,  two,  or  three  orders 
to  the  right  or  left. 


SET  VII.  DRY  GOODS  291 

10.  The  following  is  a  statement  of  everything  inventoried  at  this  time : 

Inventories,  December  6,  19 — 


Merchandise : 

Per  schedule  on  file 

- 

$22569.44 

Office  fixtures : 
Cost 
Depreciation 

$1885. 
188.50 

$1696.50 

Expense  (Resource)  : 
Stationery,  etc. 
Coal 

*18. 
9.50 

$27.50 

Expense  (Liability) : 

Due  for  telephone  service 

$12.50 

Real  Estate  (Resource) : 
Cost 

$10500.00 

Real  Estate  (Liability)  : 

Unpaid  taxes  on  property 

$125.00 

Insurance : 

Unearned  premium 


$126.50 


11.  Make  a  statement  of  losses  and  gains  and  have  it  approved. 
Use  the  following  form  to  find  the  gain  on  Merchandise  Sales  : 


Mdse.  Sales,  net 

Inv.  Nov.  19 

Net  purchases 

Total 

Inv.  Dec.  6 
Cost  of  sales 
Gain  on  sales 

Gain  on  sales  brought  down 


6000 

8000 

14000 

4500 


9500 
2500 


12000 


12000 


12000 


2500 


Note.  The  remainder  of  this  statement  is  to  be  made  in  the  same  form  as  the  one 
given  on  page  244. 

12.  Make  a  statement  of  resources  and  liabilities  and  have  it  approved. 

The  private  accounts  of  the  proprietors  are  included  in  this  statement.  If  the 
debit  of  any  private  account  is  the  larger,  it  shows  a  resource ;  if  the  credit  is  the 
larger,  a  liability. 


292 


BOOKKEEPINGl 


Note.  Make  a  careful  study  of  the  following  accounts  before  closing  the  general 
ledger. 

The  Net  Purchases,  $8000,  are  transferred  to  the  Merchandise  General  account,  and 
then  the  total  purchases  appear  on  the  debit  side  of  that  account.  Enter  the  inventory, 
$4500,  record  the  Cost  of  Sales,  $9500 ;  transfer  this  last  item  to  the  Merchandise  Sales 
account.  The  balance  of  this  account  now  shows  the  Gain  on  Sales ;  record  this  amount 
and  then  transfer  it  to  the  Loss  and  Gain  account. 


Merchandise  Gteneral 


19- 

1 

19— 

— 

Nov. 

19 

Inv. 

6000 

Dec. 

6 

Inv. 

4500 

Dec. 

6 

Net  Pur. 
Inv. 

4 

8000 

6 

Cost  of  Sales 

9 

9500 

14000 

14000 

Dec. 

8 

4500 

Merchandise  Purchases 

19— 

19- 

Nov. 

29 

Purchases 

1 

4438 

10 

Nov. 

29 

Dis.  on  Pur. 

6 

81 

10 

29 

Fr't  and  Dray. 

6 

170 

Dec. 

3 

Goods  ret. 

5 

15 

Dec. 

6 

Purchases 

3 

3438 

6 

Dis.  on  Pur. 

6 

160 

6 

Fr't  and  Dray. 

8 

210 

6 

Net.  Pur. 

2 

8000 

8256 

10 

8256 

10 

1^ 

1 

^ERCHAND 

ISE    Sa 

LES 

19- 

19- 

Nov. 

29 

Dis.  on  Sales 

6 

142 

10 

Nov. 

29 

Sales 

4 

6211 

25 

Dec. 

5 
6 
6 
6 

Goods  ret. 
Dis.  on  Sales 
Cost  of  Sales 
Gain  on  Sales 

5 
6 
2 

20 

16 

126 

9500 

2500 

20 
10 

Dec. 

6 

Sales 

7 

6073 

15 

12284 

40 

12284 

40 

Loss 

AX 

D  Gai: 

V 

19- 

Dec. 

6 

Gain  on  Sales 

9- 

2500 

I 


13.  Close  the  general  ledger  accounts.  Carry  each  partner's  share  of 
the  net  gain  or  the  net  loss  to  his  private  account.  These  accounts 
should  always  be  closed  by  Balance,  The  firm  account  contains  but  one 
item  in  this  instance,  therefore  it  should  not  be  closed. 

14.  Draw  a  check  in  favor  of  the  instructor  for  the  credit  balance  of 
your  firm  at  The  Union  Bank.    Receive  your  monthly  bank  statement. 

15.  Hand  in  all  books  to  the  instructor  for  approval. 


DEPRECIATION  293 


GENERAL  REVIEW  QUESTIONS 

1.  What  new  features  were  introduced  in  the  cash  book  for  this  set?  2.  Explain 
the  advantage  of  the  special  columns  used  in  the  journal.  3.  Under  what  circum- 
stances would  it  be  advisable  to  open  special  columns  for  different  departments  of 
merchandise  in  the  sales  book?  If  these  special  columns  were  opened  in  the  sales 
book,  what  necessary  changes  would  be  made  in  the  invoice  book?  4.  What  is  a 
power  of  attorney  ?  When  must  it  be  drawn  up  under  seal  ?  5.  Briefly  outline  what 
should  be  done  by  a  bookkeeper  on  assuming  charge  of  a  set  of  books.  6.  Give  an 
example  of  a  personal  account,  showing  a  loss.  7.  Under  what  circumstances  should 
a  suspense  account  be  opened  ?  8.  To  which  of  the  two  general  classes  of  accounts 
does  the  suspense  account  belong?  May  it  belong  to  either  class?  9.  What  is 
meant  by  protest  as  applied  to  negotiable  paper?  When  is  it  necessary?  10.  State 
briefly  the  process  of  making  a  protest.  11.  What  is  the  general  value  of  a  protest? 
12.  What  is  a  notice  of  protest?  What  items  of  information  must  it  always  give? 
Who  serves  such  a  notice  ?  13.  Briefly  outline  some  of  the  things  that  contribute 
to  a  good  business  letter.  14.  State  some  of  the  essentials  of  a  good  letter  soliciting 
trade.  15.  State  some  of  the  things  that  should  never  be  incorporated  in  a  dunning 
letter.  16.  State  some  of  the  things  that  help  to  make  a  strong  dunning  letter. 
17.  Explain  how  the  personal  accounts  with  partners  are  usually  closed.  18.  To 
which  of  the  two  general  classes  of  accounts  do  each  of  the  following  belong: 
(a)  the  proprietors'  private  accounts ;  (b)  the  investment  account  or  accounts  of  a 
business ;  (c)  C.O.D.  accounts  ?  19.  Give  an  example  of  a  cash  account  showing  an 
overdraft.^  20.  Name  the  two  leading  mercantile  agencies  of  the  United  States. 
What  is  their  principal  business  ? 

HOW  TEMPORARY  OVERDRAFTS  ARE  TREATED 

1.  The  amount  of  the  overdraft  should  be  indicated  in  red  ink  in  the  check  book. 

2.  If  there  is  no  cash  in  the  safe,  the  amount  of  the  overdraft  should  equal  the 
excess  of  the  cash  credits  over  the  cash  debits  in  the  cashbook. 

3.  If  there  is  cash  in  the  safe,  the  difference  between  the  overdraft  and  the  amount 
in  the  safe  should  equal  the  balance  shown  in  the  cashbook. 

DEPRECIATION 

The  term  depreciation,  in  bookkeeping,  indicates  a  certain  loss  on  prop- 
erty due  to  wearing  out,  deterioration,  or  disintegration.  This  loss  applies 
to  all  forms  of  personal  property,  such  as  buildings,  machinery,  furniture 
and  fixtures,  such  loss  being  due  to  the  action  of  the  elements,  to  wearing 
out  by  use,  and  to  other  causes  which  tend  to  lessen  values. 

When  property  is  first  bought  or  comes  into  the  possession  of  the  busi- 
ness its  value  as  an  asset  is  the  cost  price,  but  as  time  goes  on  this  property 

^  An  overdraft  is  in  reality  a  loan  advanced  by  the  bank.  Not  infrequently  the  de- 
positor leaves  some  security  with  the  bank  as  a  pledge  in  case  an  overdraft  occurs.  Over- 
drafts are  not  of  vejy  frequent  occurrence  in  actual  business,  and  when  they  do  occur  they 
are  but  temporary  balances  which  are  generally  made  good  as  soon  as  they  are  discovered. 


294  BOOKKEEPING 

as  a  machine  or  a  building  becomes  through  use  or  exposure  in  need  of 
repair,  and  this  is  true  even  though  repairs  may  not  yet  be  imperative. 
This  fact  indicates  clearly  that  the  value  has  lessened.  To  illustrate :  an 
automobile  in  regular  use  is  constantly  wearing  out  and  its  value  de- 
creasing, but  it  must  necessarily  be  some  time  before  the  wearing  out 
reaches  such  a  stage  that  repairs  are  needed,  or  that  some  parts  must  be 
replaced.    This  decrease  in  the  value  of  the  machine  is  depreciation. 

An  ever-present  question  is  how  to  show  this  depreciation  in  a  way  to 
approximate  the  loss  without  introducing  difficult  methods  of  bookkeep- 
ing. The  importance  of  setting  forth  these  facts  depends  somewhat  on 
the  kind  of  business  under  consideration,  —  whether  it  is  an  individual 
proprietorship,  or  a  partnership  managed  by  the  owners,  or  a  corporation 
which  must  give  extended  information  to  many  stockholders  who  have 
nothing  to  do  with  the  direct  management  or  control  of  the  business, 
but  to  whom  definite  reports  must  be  given. 

A  building  in  which  a  factory  is  situated  is  constantly  wearing  out, 
even  though  it  may  be  repaired  as  often  as  repairs  are  needed.  This 
lessening  of  the  value  is  a  cost  of  conducting  the  business  and  ought  to 
go  in  with  other  losses  in  the  financial  showing.  One  of  the  simplest 
ways  of  showing  that  loss  would  be  every  year  to  calculate  how  much 
depreciation  had  gone  on  and  charge  that  impairment  to  Loss  and  Grain 
•and  credit  Property/.  For  example :  the  property  is  a  factory  building 
listed  on  the  balance  sheet  at  |1 0,000 ;  at  the  end  of  a  year  there  is  a 
5%  depreciation  calculated;  this  5%,  |500,  should  be  charged  to  Loss 
and  Gain,  with  the  explanation  that  it  is  the  depreciation  on  the  building, 
and  the  amount  should  be  credited  to  the  Building  Account;  at  the  begin- 
ning of  the  next  financial  period  the  building  must  appear  on  the  balance 
sheet  at  a  valuation  of  only  $9500.  If  any  additions  or  improvements 
had  been  made  on  the  building,  that  would  be  a  separate  matter  and 
should  be  treated  separately,  based  upon  the  facts ;  the  amount  involved 
would  be  charged  to  Building  Account  and  credited  to  Cash. 

Many  accountants,  especially  when  the  business  is  large  and  the 
property  complicated,  have  devised  various  schemes  for  equalizing  depre- 
ciation. For  instance:  charges  are  made  every  month  to  loss  and  gain 
for  1/12  of  the  estimated  annual  amount  for  impairments,  to  be  credited 
to  the  building  or  other  property  account.  For  example,  referring  to  the 
previous  illustration,  the  |500  might  appear  as  a  liability  under  some 
such  name  as  reserve  for  depreciation,  indicating,  for  the  purpose  of  book- 
keeping, that  the  amount  provided  for  depreciation  on  the  liability  side 
is  to  be  subtracted  from  the  original  cost  on  the  asset  side,  the  difference 
being  the  true  value.  • 


A  WRITTEN  REVIEW  296 

The  particular  plan  for  showing  the  depreciation  is  secondary  in  im- 
portance to  the  fact  that  the  property  shown  on  the  balance  sheet  should 
not  be  overvalued,  under  conditions  that  will  tend  to  deceive  those  who 
examine  it.  It  will  be  sufficient  if  the  amount  of  the  property  to  be 
written  off  is  actually  taken  from  the  property  account. 

What  has  been  said  about  depreciation  for  buildings  may  be  applied 
to  all  other  property  which  tends  to  wear  out,  to  waste,  or  to  become  less 
valuable  as  time  passes  on.  Nothing,  in  short,  should  be  carried  at  its 
full  value  when  such  value  has  been  materially  lessened. 


EXERCISE  64 
A  Written  Review 

The  following  review  exercises  are  suggested : 

1.  A,  B,  and  C  are  partners,  with  investments  of  $6000,  $4000,  and 
$2000  respectively.  After  paying  A  a  salary  of  |750,  which  was  charged 
to  expense,  the  net  profit  for  the  year  is  $2466.24.  During  the  year  A 
withdrew  $750,  in  addition  to  his  salary,  B  $600,  and  C  $450. 

Required:  the  net  gain  of  each,  on  the  basis  of  the  original  invest- 
ment ;  the  present  worth  of  each. 

2.  D,  E,  and  F  invested  equal  amounts,  and  agreed  to  share  all  results 
equally.  When  the  firm  dissolved,  the  resources  amounted  to  $9768.45, 
and  the  liabilities  to  $11,268.45.    The  net  loss  was  $9000. 

Required ;  the  net  insolvency  of  the  business ;  each  partner's  invest- 
ment. 

3.  A  and  B  engaged  in  business  as  partners,  investing  $8000  and 
$4000  respectively.  They  agreed  to  share  all  gains  or  losses  in  propor- 
tion to  the  investment.  At  dissolution  the  following  were  the  resources 
and  liabilities : 

Cash  $2050 

Bills  Rec.  4075 

Real  Estate  •   2050 

Merchandise  9655 

Accounts  Rec.  2170 

Bills  Pay.  2945 

Accounts  Pay.  2788 

Of  the  Accounts  Receivable  10%  cannot  be  collected. 
If  the  partnership  lasted  1  yr.,  and  A  drew  out  $500,  and  B  drew  out 
$300,  what  is  the  interest  of  each  partner  at  closing  ? 


296  BOOKKEEPING 

4.  X,  Y,  and  Z  made  equal  investments  in  a  total  capital  of  $9000. 
During  the  year,  on  the  same  date,  each  partner  added  |1000  to  his 
investment. 

At  the  end  of  one  year  the  resources  and  liabilities  were  as  follows : 


Cash 

$2864.75 

Keal  Estate 

3850. 

Accounts  Pay. 

1534.50 

Bills  Rec. 

1675.25 

Bills  Pay. 

1480. 

Office  Fixtures 

264.20 

Horses  and  Wagons 

376.20 

Accounts  Rec. 

2654.25 

Merchandise 

6329.85 

At  the  close  of  the  year  what  was  due  each  partner,  gains  or  losses 
being  shared  equally  ? 

In  examples  2,  3,  and  4,  in  addition  to  the  necessary  statements  to  find  the 
results  or  the  condition  of  the  business,  accounts  may  be  opened  on  ledger  paper 
with  the  proprietors  and  for  the  other  items,  and  the  present  worth  of  each  pro- 
prietor may  be  shown. 


OKGAKIZATIOK  OF  CORPORATIONS  297 

CORPORATIONS  AND    KINDRED   ORGANIZATIONS 
COMBINATIONS  OF  CAPITAL 

Commercial  interests  of  the  present  day  require  such  large  invest- 
ments as  to  make  combinations  of  capital  a  necessity.  Neither  the 
individual  nor  the  ordinary  partnership  can  command  sufficient  funds 
to  carry  on  the  manufacturing  or  the  transportation  enterprises  of  to- 
day. The  result  is  that  corporations  and  kindred  organizations  have 
been  formed  generally  throughout  the  country. 

The  Partnership.  A  partnership  ordinarily  represents  but  a  limited 
amount  of  capital,  is  formed  by  agreement,  and  may  be  dissolved  by 
the  action  of  any  one  partner.  Each  partner,  except  in  the  case  of  a 
limited  partnership,  is  also  liable  for  all  of  the  debts  of  the  business. 

The  Joint-Stock  Company.  A  joint-stock  company  is  in  reality  a 
partnership,  the  affairs  of  the  business  being  conducted  by  officers 
chosen  by  the  stockholders.  A  larger  number  of  investors  may  associate 
themselves  under  a  joint-stock-company  agreement  than  can  work  to- 
gether effectually  as  partners,  and  the  action  of  one  stockholder  cannot 
dissolve  a  joint-stock  company.  In  general,  the  liability  of  the  stock- 
holders is  the  same  as  that  of  partners  in  a  copartnership. 

Note.  The  statutes  of  most  of  the  states  provide  for  limited  joint-stock  companies, 
thereby  limiting  each  stockholder's  liability  to  the  amount  of  stock  owned.  A  limited 
joint-stock  company  may  be  known  by  the  manner  in  which  its  name  is  written  or  printed  ; 
for  instance,  "Walter  Baker  Company,  Limited. 

The  Corporation.  A  corporation  is  said  to  be  an  artificial  person.  It 
is  composed  of  a  number  of  persons  endowed  with  the  power  to  act  as 
one  individual.  It  is  ordinarily  organized  under  a  general  statute  of 
any  given  state,  but  it  may  be  organized  under  a  special  charter  granted 
by  the  legislature.  The  liability  of  each  stockholder  is  generally  limited 
to  the  amount  of  stock  owned.  A  corporation  affords  an  opportunity  for 
many  persons  of  small  means  to  unite  in  carrying  on  large  enterprises 
under  efficient  management. 

ORGANIZATION  OF  CORPORATIONS 

Some  details  of  the  organization  of  corporations  will  be  of  interest  to 
the  student.  The  laws  of  the  various  states  are  very  different  regarding 
such  organization.  Persons  who  desire  to  form  a  corporation  should 
employ  an  attorney  to  conduct  every  step,  thus  insuring  a  compliance 


298  BOOKKEEPING 

with  the  requirements  of  the  statute  of  the  state  under  whose  laws  the 
corporation  is  organized. 

How  Formed.  The  following  general  statements  apply  to  the  forma- 
tion of  corporations. 

1.  The  statute  specifies  the  least  number  of  persons  who  can  form  a 
corporation.    These  persons  or  a  greater  number  unite  in  a  written  state- 
ment to  the  Secretary  of  State  setting  forth  the  following : 
a.  The  corporate  name  assumed. 
h.  The  purpose  for  which  the  corporation  is  formed. 

c.  The  place  where  it  is  to  be  established  or  located. 

d.  The  amount  of  capital  stock. 

e.  The  par  value  and  the  number  of  shares  of  capital  stock. 

Any  other  information  which  a  particular  statute  may  re- 
quire must  be  included. 
Fees.    Certain  fees  are  required  by  the  state  for  issuing  a  charter,  and 
for  recording  and  filing  certificates. 

Powers.    The  powers  of  a  corporation  may  be  stated  as  follows : 
a.  To  have  succession. 
h.  To  sue  or  to  be  sued  under  its  corporate  name. 

c.  To  use  a  common  seal. 

d.  To  purchase,  to  hold,  and  to  convey  lands  and  chattels. 

e.  To  elect  officers  and  to  appoint  agents. 
/.  To  make  by-laws. 

Board  of  Directors.  After  incorporation  a  meeting  of  the  subscribers 
is  held  to  determine  the  number  of  directors  and  to  elect  them.  In  the 
election  of  the  board  of  directors  each  stockholder  is  entitled  to  a  vote 
for  each  share  of  stock. 

Officers  and  Management.  After  the  directors  are  chosen  they  elect 
from  their  number  the  necessary  officers  of  the  board.  The  general  man- 
agement of  a  corporation  is  entirely  in  the  hands  of  the  board  of  directors. 

Capital  Stock.  The  capital  stock  of  a  corporation  is  the  amount  of 
capital  authorized  by  the  charter,  and  represents  the  combined  invested 
interests  of  all  the  stockholders. 

Classes  of  Stock.  The  varying  conditions  and  limitations  under  which 
stock  is  issued  to  the  stockholders  of  a  corporation  give  rise  in  many 
states  to  several  distinct  classes  of  stock,  among  the  more  important  of 
which  are  common  stock,  preferred  stock,  and  treasury  stock. 

Common  Stock  is  stock  upon  which  dividends  are  paid  after  certain 
dividends  have  been  allowed  on  the  preferred  stock. 

Preferred  Stock  is  stock  upon  which  dividends  are  paid  out  of  the  accrued 
profits  before  any  allowance  is  made  for  dividends  on  common  stock. 


BOOKS  PECULIAR  TO  CORPORATIONS  299 

Treasury  Stock  may  be  either  common  or  preferred  stock  purchased 
from,  or  forfeited  or  donated  by,  the  stockholders. 

Note.  Sometimes  the  number  of  shares  of  stock  of  a  corporation  is  increased  without 
a  corresponding  increase  of  the  property  owned.  This  act  is  known  as  watering  stock. 
Stock  is  sometimes  watered  in  the  reorganization  of  a  railroad  or  the  consolidation  of 
different  railway  lines  by  fictitiously  increasing  the  value  of  the  franchise  or  property. 
To  water  stock  Is  deceptive,  if  not  dishonest,  and  therefore  is  never  justifiable.  If  the 
capital  stock  of  a  concern  is  not  commensurate  with  the  demands  of  the  enterprise,  it 
can  be  increased  in  a  legitimate  manner. 

The  term  watered  stock  is  said  to  be  derived  from  the  action  of  some  farmers  in  giving 
their  live  stock,  just  before  weighing  them  for  market,  a  plentiful  supply  of  water  as  a 
means  of  increasing  their  weight. 

Certificates  of  Stock.  As  soon  as  a  subscription  is  paid  a  certificate 
is  issued  to  the  subscriber.  A  stockholder  may  transfer  his  certificate  by 
an  instrument  in  writing  signed  by  him,  which  is  recorded  in  a  book 
kept  for  that  purpose. 

Liabilities  of  Stockholders.  The  liability  of  stockholders  for  the  debts 
of  a  corporation  differs  widely  under  varying  conditions.  Ordinarily  a 
stockholder  is  liable  for  a  sum  equal  to  the  par  value  of  the  stock  that 
stands  in  his  name. 

Reports.  In  some  states  the  corporation  is  required  to  file  an  annual 
report  with  the  Secretary  of  State. 

Dividends.  A  dividend  is  a  pro  rata  division  of  the  profits,  or  some 
portion  thereof,  among  the  stockholders  of  a  corporation. 

Franchise  is  a  particular  privilege  granted  by  a  government  to  a 
corporation. 

The  right  to  use  the  streets  of  a  city  for  laying  railway  tracks,  for  placing  water 
mains  underground,  etc.,  are  illustrations  of  franchises  commonly  granted. 

AUXILIARY  BOOKS  PECULIAR  TO  CORPORATIONS 

The  principal  books  of  record  in  a  corporation  do  not  differ  materially 
from  those  used  in  any  other  business.  Several  special  books,  however, 
are  necessary  to  facilitate  the  issue  and  transfer  of  stock.  Among  these 
are  the  following : 

Minute  Book.  This  book  contains  a  record  of  all  the  meetings  of  the 
stockholders  or  of  the  board  of  directors,  and  is  usually  kept  by  the 
secretary  of  the  corporation. 

Installment  Scrip  Book.  This  is  a  book  of  blank  receipts  to  be  filled 
put  and  signed  by  the  secretary  and  the  treasurer  as  the  installments  are 
paid.  Upon  payment  of  the  last  installment  the  scrip  is  exchanged  for 
certificates  of  stock. 


300 


BOOKKEEPING 


Stock  Transfer  Book.  This  book  is  used  to  record  the  transfer  of 
stock  and  contains  the  permanent  records,  which  are  finally  posted  to 
the  stock  ledger. 

Form  of  Stock  Transfer  Book 


No.  of 

Certificate 

canceled 


2- 


No.  of  New 

Certificate 

issued 


/  2- 


Shares 
canceled 


/o 


New  Shares 
issued 


/^ 


Ledger 
Folio 


7- 


^^^^^;^^ 


J 


TRANSFERRED  BY 


TO 


For  Value  T^ece/uecfc^do  hereby  assign  and 
transfer  to  ^    .^s  j 

-"Z^-^'-Z^     Shares  of  the  Capital  Stock  of 

*^Ae  Union  Whip  Co.,  Springfield,  t^ass. 
W'i7ne53^?»^2^  hand  and  seal,  thia44^day 

of  i4^^<?^-<£>^/  /f/Z^ 


Sealed  and  delivered 
presence  of 


[L.S.] 


Subscription  Book.  This  book  contains  the  date  of  record,  the  names 
and  the  addresses  of  subscribers,  the  number  of  shares,  and  the  amount 
subscribed  for  by  each  stockholder. 

Form  of  Subscription  Book 

We,  the  undersigned,  do  hereby  subscribe  for  and  agree  to  take  the  number  of  shares  of  The 
Union  Whip  Company's  stock  set  opposite  our  respective  names 


DATE 

NAME  OF  STOCKHOLDER 

ADDRESS 

NO.  OF 
SHARES 

AMOUNT 

Feb. 

J.  W.  Melton 
E.  M.  Williams 
Geo.  Inman 
A.  P.  Zaner 
L.  H.  Messier 

Springfield,  Mass. 

11                        u 

50 
50 
50 
50 
50 

5000 
5000 
5000 
5000 
5000 

25000 

Note.  If  subscriptions  are  paid  in  installments,  the  subscription  and  installment 
records  are  usually  combined  in  one  book,  an  extra  column  being  provided  for  the 
installment  records. 

Dividend  Book.  This  book  contains  information  furnished  by  the  state- 
ments of  the  business  and  shows  the  names  of  the  stockholders,  tlie 
number  of  sliares  of  stock,  the  par  value  of  each  share,  the  amount  of 


OPENING  ENTRIES  FOR  CORPORATIONS 


301 


dividend  due  each  stockholder,  and  the  date  on  which  the  dividend 
was  paid. 

The  stockholder  sometimes  receipts  for  dividends  in  the  dividend  book.   When 
payment  is  by  dividend  check,  this  is,  of  course,  unnecessary. 

Form  of  Dividend  Book 

ist  Semiannual  Dividend,  Aug.  i,  1912,  3% 


STOCKHOLDER 

CERTIFI- 
CATE NO. 

NUMBER  OF 
SHARES 

PAR  VALUE 
PER  SHARE 

AMOUNT  OF 
DIVIDEND 

WHEN  PAID 

SIGNATURE  FOR 
PAYMENT 

J.  W.  Melton 

1 

50 

100 

150 

Aug. 

5 

J.  W.  Melton 

E.  M.  Williams 

2 

50 

100 

150 

5 

E.  M.  Williams 

Geo.  Inman 

3 

50 

100 

150 

5 

Geo.  Inman 

A.  P.  Zaner 

4 

50 

100 

1.50 

5 

A.  P.  Zaner 

L.  H.  Messier 

5 

50 

100 

150 

5 

L.  H.  Messier 

Stock  Certificate  Book.  This  book  contains  blank  certificates,  with 
stubs,  to  be  filled  out  and  signed,  usually  by  the  president  and  the  secre- 
tary of  the  corporation.  For  convenience  these  certificates  are  numbered 
consecutively.  The  stockholder  signs  the  stub  as  a  receipt  when  the 
certificates  are  issued  to  him. 

A  bill  of  sale  in  blank  is  always  printed  on  the  back  of  the  certificate 
to  facilitate  the  sale  and  transfer  of  stock. 

Stock  Ledger.  This  book  contains  an  account  with  capital  stock, 
debited  at  par  value,  and  with  each  stockholder,  credited  for  his  stock 
at  par  value.  When  stock  is  sold  the  seller  is  debited  and  the  buyer 
credited,  thus  preserving  the  equality  of  the  ledger.  The  stock  ledger 
is  similar  in  form  to  the  ordinary  ledger ;  it  is  purely  a  private  book,  and 
is  not  referred  to  in  making  the  business  and  financial  statements. 


EXERCISE  65 
OPENING  ENTRIES  IN  CORPORATION  BOOKKEEPING  ILLUSTRATED 

1.  A  corporation  has  been  formed  with  a  capital  stock  of  |75,000. 
This  sum  has  been  fully  paid  in  cash.    Required,  the  necessary  entry. 
The  following  entry  should  be  made  on  the  left  side  of  the  cashbook  : 


Jan.  1 


Capital  Stock 


Paid  in  capital 


75000 


Note.   If  it  is  desired  to  show  the  subscription  account  in  the  ledger,  two  entries 
should  be  made  for  the  above  transaction,  as  follows  : 

1.  Subscription,  To  Capital  Stock,  in  the  journal,  for  the  investment  decided  upon. 

2.  Cash,  To  Subscription,  in  the  cashbook,  for  the  capital  stock  paid  in. 


HP"  ^P  'IP'  ^P  '^P  'WfiUJ^  %W  '*fP'  **tSi>  ^iir^ 


On 


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1 


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^ 

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O 


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On 

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302 


OPENING  ENTRIES  .FOR  CORPORATIONS 


303 


2.  A  corporation  has  been  formed  with  a  capital  stock  of  $150,000. 
Of  this  sum  |1 25,000  has  been  subscribed  and  paid ;  the  balance  is  to 
be  held  in  reserve,  unissued.    Required,  the  necessary  entries. 

The  first  entry  should  appear  in  the  journal. 


Subscription 
Capital  Stock 


Capital  stock  this  day 
subscribed 


125000 


125000 


The  second  entry  should  appear  on  the  left  side  of  the  cashbook. 


Jan.  1 


Subscription 


Subscribed  capital 
stock  paid 


125000 


3.  A  corporation  has  been  formed  with  a  capital  stock  of  $100,000 : 
$75,000  has  been  subscribed ;  of  this  sum  $50,000  has  been  paid  in 
cash ;  the  balance,  $25,000,  is  to  be  paid  in  five  equal  monthly  install- 
ments. The  balance  of  the  capital  stock  is  to  be  held  in  reserve,  unissued. 
Required,  the  necessary  entries. 

The  first  entry  should  appear  in  the  journal. 


Subscription 
Capital  Stock 


Capital  stock  this  day 
subscribed 


75000 


75000 


The  second  entry  should  appear  on  the  left  side  of  the  cashbook. 


Jan.  2 


Subscription 


First  payment  on  sub- 
scribed stock 


50000 


4.  One  month  after  the  organization  of  the  corporation  the  first  pay- 
ment on  installments  was  made.  Required,  the  necessary  entry.  The 
entry  should  be  made  on  the  left  side  of  the  cashbook  as  follows : 


Feb.  1 


Subscription  Installment  No.  1 


5000 


304 


BOOKKEEPING 


Note.  If  it  is  desired  to  show  the  installment  account  in  the  ledger,  Exercise  3 
would  require  the  following  entry :  Cash  and  Installments  debited,  to  Subscription  credited. 
Should  Exercise  3  be  entered  in  this  manner,  the  necessary  entry  for  Exercise  4  would  be 
Installments  debited,  and  Cash  credited. 

The  first  form  of  entry  is  preferable. 


5.  J.  W.  Ball  is  the  owner  of  a  wagon 

manufactory  located  at  492 

Causeway  St.  A  statement  just  made  exhibits  the 

resources  and  liabilities 

as  follows : 

Resources 

Real  Estate 

$5000 

Machinery 

6000 

Baw  Material 

5000 

Patents 

2000 

Finished  Products 

2000 

Accounts  Beceivable 

3000 

Liabilities 

Accounts  Payable 

$4000 

Mortgage  Payable 

5000 

He  decides  to  join  with  C.  W.  Henry,  B.  H.  Bobbins,  and  W.  E.  Law 
in  the  formation  of  a  corporation,  under  the  name  of  The  Ball  Wagon 
Co.  The  capital  stock  is  to  be  $68,000,  divided  mto  680  shares  of  $100 
each,  of  which  each  of  the  incorporators  is  to  have  160  shares.  J.  W. 
Ball  is  to  receive  160  shares  of  paid-up  stock  for  his  interest  as  above. 
The  balance,  40  shares,  is  to  be  held  in  reserve,  unissued. 

Note.  The  shares  received  by  J.  W.  Ball  represent  not  only  the  net  resources  of  the 
business  which  he  owned,  but  the  Good  Will  also. 

The  business  is  to  be  continued  at  the  old  location  of  J.  W.  Ball,  and 
a  new  set  of  books  opened.    Required,  the  necessary  entries. 

a.  To  close  the  old  books  of  J.  W.  Ball,  the  followuig  journal  entyy 
should  be  made : 


J.  W.  Ball 
Mortgage  Pay. 
Accts.  Pay. 

Real  Estate 

Machinery 

Raw  Material 

Patents 

Accts.  Rec. 

Finished  Products 


For  closing  the  accounts 
on  the  books  of  J.  W. 
Ball 


14000 
5000 
4000 


5000 
6000 
5000 
2000 
3000 
2000 


OPENING  ENTRIES  FOR  CORPORATIONS 


305 


h.  The  good  will  of  the  business  of  J.  W.  Ball  is  estimated  at  $2000. 
The  journal  entry  to  open  the  new  books  is  as  follows : 


Real  Estate 
Machinery 
Raw  material 
Patents 
Accts.  Rec. 
Finished  Products 
Good  Will 
Subscription 

Mortgage  Pay. 

Accts.  Pay. 

Capital  Stock 


Mill  property 

Plant,  tools,  etc. 

On  hand 

Held  by  corporation 

Due  the  corporation 

On  hand 

Estimated  value 

Stock  subscribed  for 

Mortgage  on  real  estate 

Owed  by  the  corporation 

Invested  capital 


5000 
6000 
5000 
2000 
3000 
2000 
2000 
48000 


5000 

4000 

64000 


6.  C.  W.  Henry,  B.  H.  Robbins,  and  W.  E.  Law  pay  for  their  sub- 
scriptions in  cash.  Required,  the  necessary  entry.  The  following  entry 
should  appear  on  the  left  side  of  the  cashbook. 


Jan.  6 


Subscription  C.  W.  Henry,  160  shares,  16000 
B.  H.  Robbins,  160  shares,  16000 
W.  E.  Law,  160  shares         16000 


48000 


7.  Sell  10  shares  of  the  unsold  capital  stock  referred  to  in  Exercise  5 
at  $100  a  share  to  A.  B.  Miller  on  his  note  at  30  da.  Required,  the 
necessary  entry. 

The  following  entry  should  be  made  in  the  journal. 


Bills  Rec. 
Capital  Stock 


10  shares  sold  A.  B. 
Miller  on  his  note 
at  30  da. 


1000 


1000 


8.  I.  N.  Salsbury,  F.  O.  Gray,  and  E.  W.  Masten  are  associated  as 
partners  in  a  knitting  mill  under  the  firm  name  of  Salsbury,  Gray  &  Co. 
Their  investments  are  as  follows : 


I.  N.  Salsbury 
F.  0.  Gray 
E.  W.  Masten 


$7400 
7200 
4900 


They  decide  to  reorganize  and  incorporate  their  business.    A  capital 
stock  of  $30,000,  consisting  of  300  shares  at  |100  per  share,  is  decided 


306 


BOOKKEEPING 


upon.    The  partners  are  to  receive  paid-up  stock  for  their  respective 
interests  and  the  Good  Will,  as  follows: 

I.  N.  Salsbury  80  shares 

F.  0.  Gray  80  shares 

E.  W.  Hasten  65  shares 

Of  the  remaining  capital  D.  E.  Mosher  subscribes  for  25  shares  ;  M.  P. 
Keeler,  15  shares ;  R.  Cronk,  10  shares.  The  balance  of  the  capital  stock, 
25  shares,  is  to  be  held  in  reserve,  unissued.  A  statement  of  the  present 
resources  and  liabilities  has  been  submitted  by  the  old  partners  and  is 
accepted  by  the  corporation.    This  statement  is  as  follows : 


Resources 

Accounts  Receivable 

14000 

Raw  Material 

3000 

Plant 

3000 

Real  Estate 

6000 

Cash 

2700 

Finished  Product 

2900 

Liabilities 

Accounts  Payable 

$1600 

Bills  Payable 

500 

The  books  of  the  old  firm  will  be  used  by  the  corporation.  Required, 
the  necessary  entry  to  change  the  partnership  accounts  so  that  they  will 
serve  the  purposes  of  a  corporation. 

The  following  entry  should  be  made  in  the  journal. 


I.  N.  Salsbury 
F.  O.  Gray 
E.  W.  Hasten 
Subscription 
Good  Will 
Capital  Stock 


To  close  account 
To  close  account 
To  close  account 
Subscribed 
Estimated  value 
Subscribed 


7400 
7200 
4900 
5000 
3000 


27500 


It  should  be  noticed  that  the  amount  charged  to  the  G-ood  Will  account 
is  the  difference  between  the  net  resources  of  the  private  partnership  and 
the  total  stock  to  be  received  by  Salsbury,  Gray,  and  Hasten. 

After  this  entry  is  posted,  the  books  are  in  condition  to  proceed  with 
the  records  of  the  cor23oration. 


OPENING  ENTRIES  FOR  CORPORATIONS  307 

EXERCISE  66 
OPENING  ENTRIES  IN  CORPORATION  BOOKKEEPING 

Directions.  After  studying  the  foregoing  illustrations,  take  a  sheet  of 
journal  paper  and  make  the  proper  records  for  the  following  transactions  : 

1.  A  corporation  has  been  formed  with  a  capital  stock  of  $85,000.  This 
sum  has  been  subscribed  and  paid  in  cash.    Make  the  necessary  entry. 

2.  A  corporation  has  been  formed  with  a  capital  stock  of  $75,000 ; 
♦50,000  has  been  subscribed  and  paid;  the  balance,  |25,000,  is  to  be 
held  in  reserve,  unissued.    Make  the  necessary  entries. 

3.  A  corporation  has  been  formed  for  the  manufacture  of  paper-box 
machinery  with  a  capital  stock  of  $150,000.  The  owner  of  the  patents 
is  to  receive  400  shares  of  stock,  at  |100  per  share,  for  his  inventions. 
Of  the  stock  remaining,  800  shares  have  been  subscribed  and  paid  in  full. 
The  remainder  of  the  stock,  300  shares,  is  to  be  held  in  reserve,  unissued. 
Make  the  necessary  entries  to  open  the  books  of  the  corporation. 

4.  A  joint-stock  company  has  been  formed  for  the  purpose  of  manu- 
facturing paper  boxes.  The  capital  stock  is  to  be  $50,000,  divided  into 
1000  shares  of  $50  each,  200  shares  of  which  are  preferred  stock,  and 
the  remaining  800  shares  common  stock.  The  preferred  stock  has  been 
subscribed  and  paid.  Of  the  common  stock  60%  has  been  subscribed  at 
par.  Of  this  latter  sum  40%  has  been  paid  in  cash,  and  the  balance  is 
to  be  settled  for  in  five  equal  monthly  installments.  The  balance  of  the 
capital  stock  is  to  be  held  in  reserve,  unissued.  Make  the  necessary 
entries  to  open  the  books  of  the  joint-stock  company. 

5.  A  corporation  has  been  formed  with  a  capital  stock  of  $40,000, 
divided  into  400  shares  at  $100  per  share.  Of  the  capital  stock  75%  has 
been  subscribed  at  par,  and  full  payment  made  in  cash ;  the  remainder  is 
to  be  held  in  reserve,  unissued.    Make  the  necessary  opening  entries. 

6.  C.  W.  Williams  is  the  sole  owner  of  a  manufacturing  plant.  He 
has  resources  and  liabilities  as  follows : 


Resources 

Cash 

$5000 

Plant 

6000 

Real  Estate 

5000 

Raw  Material 

5000 

Accounts  Receivable 

2000 

Liabilities 

Accounts  Payable 

$2000 

Mortgage  Payable 

5000 

308  BOOKKEEPING 

He  decides  to  join  with  E.  B.  Monroe,  H.  L.  Hinnan,  and  W.  E.  Rollins 
in  the  formation  of  a  corporation.  The  capital  stock  is  to  be  $70,000, 
divided  into  700  shares  at  $100  each,  of  which  each  of  the  incorporators 
is  to  have  170  shares.  The  balance,  20  shares,  is  to  be  held  in  reserve, 
unissued.  -  The  business  is  to  be  continued  at  the^  old  location  of  C.  W. 
Williams  and  a  new  set  of  books  opened.  Make  the  necessary  entries 
to  close  the  books  of  C.  W.  Williams  and  to  open  those  of  the  corporation. 

Note.  The  difference  between  the  resources  and  liabilities  of  C.  W.  Williams  and 
the  total  stock  credited  to  him  is  charged  to  the  Good  Will  account. 

7.  Sell  to  A.  B.  Miller,  on  his  note  at  30  da.,  5  shares  of  the  unsold 
capital  stock  referred  to  in  Exercise  6,  at  par.   Make  the  necessary  entry. 

8.  W.  E.  Frye,  C.  W.  Gray,  and  E.  O.  Burrill  are  associated  as  part- 
ners in  the  manufacture  of  shoes,  under  the  firm  name  of  Frye  &  Gray. 
Their  investments  are  as  follows : 

W.  E.  Frye  $14800 

C.  W.  Gray  14400 

.    E.  0.  Burrill  9800 

They  decide  to  reorganize  and  incorporate  their  business.  A  capital 
stock  of  $60,000,  consisting  of  600  shares  at  $100  per  share,  is  decided 
upon.  The  partners  are  to  receive  paid-up  stock  for  their  respective 
interests  and  the  Good  Will,  as  follows : 

W.  E.  Frye  160  shares 

C.  W.  Gray  160  shares 

E.  0.  Burrill  130  shares 

Of  the  remaining  capital  C.  H.  Dean  subscribes  50  shares;  Fred 
Everitt,  30  shares ;  Charles  Baker,  10  shares.  The  balance  of  the  capital 
stock,  60  shares,  is  to  be  held  in  reserve,  unissued.  A  statement  of  the 
present  resources  and  liabilities  has  been  submitted  by  the  old  partner 
and  is  accepted  by  the  corporation.    This  statement  is  as  follows : 


Resources 

' 

Bills  Receivable 

$8000 

Operating  Products 

6000 

Plant 

3000 

Real  Estate 

15000 

Cash 

5400 

Finished  Products 

6800 

Liabilities 

Mortgage  Payable 

$4200 

THE  VOUCHER  SYSTEM  OF  BOOKKEEPING  309 

The  books  of  the  old  firm  will  be  used  by  the  corporation.  Make  the 
necessary  entry  to  change  the  pa,rtnership  accounts  so  that  they  will 
serve  the  purposes  of  the  corporation. 

9.  A  corporation  is  organized  with  a  capital  stock  of  ^00,000  to 
work  a  gold  mine  in  Alaska.  C.  L.  Bender,  who  holds  a  deed  to  the 
mine,  transfers  it  to  the  company  in  payment  for  1000  shares  of  paid-up 
stock  at  a  par  value  of  |100  per  share.  Ninety  per  cent  of  the  remainder 
of  the  stock  has  been  subscribed  and  fully  paid.  The  balance  is  to  be 
held  in  reserve,  unissued.    Make  the  necessary  opening  entries. 

10.  Ten  shares  of  the  above  stock  has  been  sold  for  cash  at  |100  per 
share.    Make  the  necessary  entry. 

THE  VOUCHER  SYSTEM  OF  BOOKKEEPING 

Among  the  many  modern  devices  for  economically  systematizing 
accounts  and  properly  distributing  the  various  items  of  expenditure  is 
what  is-  known  as  the  voucher  system.  This  system  was  primarily 
planned  for,  and  is  particularly  adapted  to,  large  industrial  and  manufac- 
turing enterprises,  such  as  railroad  companies,  street-car  plants,  etc.;  but 
the  general  principles  of  the  system  are  so  susceptible  of  modifications  that 
they  have  been  found  well  adapted  to  some  other  lines  of  business. 

The  system  derives  its  name  from  a  special  form  of  combined  abstract 
of  invoice  and  receipt  known  as  a  voucher^  which  is  issued  for  purchases 
and  other  expenditures  of  the  business.  Where  the  system  is  found  in 
its  highest  stage  of  development  it  is  characterized  by  approved  methods 
for  filing  paid  and  unpaid  bills  and  recording  firm  and  corporate  disburse- 
ments. The  method  of  filing  vouchers,  the  classification  and  the  distribu- 
tion of  amounts  paid,  etc.,  vary  greatly  in  different  lines  of  business. 

In  the  bookkeeping  of  large  railroad  concerns  and  kindred  organiza- 
tions, vouchers  are  usually  issued  for  absolutely  everything  in  the  way 
of  expenditures  connected  with  the  business,  the  fundamental  idea  being 
to  have  every  recorded  transaction,  as  far  as  possible  and  practicable, 
evidenced  by  a  paper  or  voucher  filed  in  the  office.  Some  houses  use 
vouchers  only  in  making  payments  for  certain  classes  of  goods,  usually 
such  articles  as  are  used  in  manufacturing  processes,  etc.,  the  cost  of 
which  it  is  generally  desirable  to  enter  in  "separate  accounts  in  the  books 
of  record. 

Manner  of  issuing  Vouchers.  Vouchers  are  issued  for  both  paid  and 
unpaid  bills.  As  soon  as  any  bill  has  been  received  and  audited  a 
voucher,  conveniently  numbered,  is  issued  for  the  transaction.  The 
voucher  is  simply  an  abstract  of  the  bill  or  the  invoice  with  the  necessary 


310 


BOOKKEEPING 


Form  of  Combined  Voucher  and  Check 

Voucher  5^o.  /  d^  Boston,  Mass.,-^^  /  <?J  9  — 

Issued  by 

^he  y^^ion  WhhCompany 

_______^ 7^-t7-z>^:^>;^;^-t.^^^^^g^.  (!^ 


INV.  NO. 


/^<^-^ 


7 


DESCRIPTION  OF  PURCHASE 


/fZ 


7 


Account  verifiedL  b 


Auditor 


Apnp^seed  for  payment 


resident 


Tieceived  of  ^he  Union  Whip  Company  |/^Z- 


(  y7^^^/7^^.-y7^^^^  /f^^^^^  - 


"Doll 


ars 


In  full  for  the  above  account 


Boston,  Mass.,  ^?^'  /  iP,  19—     d^o,lA^ 
traders    d^ational    ^ank 


V/^^ 


In  full  for  Voucher  tKp,  /^4^ 


/ 


-f^^J-r^ 


IDoll 


ars 


:^ 


-^2<. 


^resident 


data  for  filing,  etc.  A  record  of  every  voucher  is  made  on  the  stub  of 
the  voucher  book.  This  record  gives  a  condensed  history  of  what  is  con- 
tained on  the  voucher.  For  convenience,  the  stub  is  printed  with  the 
names  of  the  various  accounts  to  be  charged  in  the  issuing  of  vouchers. 

When  any  bill  is  paid,  the  voucher  representing  it  is  detached  from 
the  stub  and  presented  to  some  officer  of  the  firm  for  approval  and 
signature.    The  voucher  is  then  sent,  with  a  check,  to  the  creditor.   He 


THE  VOUCHER  SYSTEM  OF  BOOKKEEPING 


311 


§  i 


CO 


o 
o 


V 


>t 


&0 

•a 


be 


3:^  S  2^  S  § 


l^   ^   cS 


<A     Ql>  ^ 


m 


^  .— I  «  a>  53 
OT  5P  >  '1^  "S  tJ 

c  *S  rf  .S  ^  •?; 


.-  < 


a 


^ 


03    2    2    fH    ni    f 
g^P»4  H  P4  C»  M 


,i3 
&0 


312  BOOKKEEPmG 

signs  the  receipt  printed  at  the  bottom  of  the  voucher  and  returns  it. 
This  voucher,  when  returned,  is  filed  for  reference. 

For  time  purchases  a  voucher  is  made  out  at  the  time  the  goods  are 
received  and  the  bill  is  audited.  It  is  not  detached  from  the  stub  of  the 
voucher  book  until  the  time  of  payment.  When  the  bill  becomes  due 
the  voucher  is  detached  from  the  voucher  stub  in  the  regular  way  and 
presented  to  the  proper  officer  for  approval  and  signature.  It  is  then 
sent  away  the  same  as  the  voucher  used  on  a  cash  bill. 

Model  Voucher  Book.  The  model  voucher  book  given  on  page  311  is 
seK-explanatory.  The  form  of  voucher  given  shows  that  the  United 
States  Whip  Company,  of  Boston,  Mass.,  has  purchased  of  Bradley, 
Morgan  &  Co.,  of  New  York,  goods  as  per  invoice  No.  74,  amounting 
to  $1269.40,  for  which  a  cash  payment  was  made  on  Feb.  6,  less  2%. 
The  receipt  at  the  bottom  of  the  voucher  shows  that  Bradley,  Morgan 
&  Co.  received  the  remittance  Feb.  7.  The  stub  gives  a  complete  history 
of  everything  connected  with  the  voucher. 

Voucher  Check.  Payment  for  the  voucher  illustrated  on  page  311 
was  made  by  check.  Many  houses  print  the  voucher  and  the  voucher 
check  as  one  blank  (see  page  310),  to  insure  an  early  return  of  the  voucher. 
When  this  is  done  it  is  necessary  that  the  voucher  be  returned  with  the 
check,  through  the  bank,  before  payment  can  be  received.  Banks,  how- 
ever, object  to  the  handling  of  this  form  of  check,  and  what  is  known 
as  the  voucher  check  is  largely  taking  the  place  of  the  old  form  of 
attached  voucher  and  check.  The  illustration  following  is  suggestive 
of  the  usual  form  of  a  voucher  check. 


Boston,  Mass.r^^  09.^=i    ^o.  /  2-f 

United  States  Whip  Company 

'Pay  to  the  order  nf  ^-%^^^^^^ .  >^^^^7-^,..^2>^ 

—V^yf/-eyC^/-^^^y(^^..^..^r:^  —  —T>ollars 

It\  full  for  Voucher  U^o.  /Zf 

Vo  Vhe  Urjion  Sank  \  ^  ^  ^  ^y, /;  ,     ^^^ 

-^ii^^-i^U/:y?f:^/^-g!.^L<d^ir?^,  Manager 


SET  VIII.   MANUFACTURING  BUSINESS 

Selling  Price  List 


NO. 

LENGTH 

QUALITY 

PRICE  PER  OOZ. 

30 

6  ft. 

Java 

$1.10 

37 

6  ft. 

Java 

1.40 

60 

6  ft. 
6  ft. 
6  ft. 
6  ft. 
6ift. 
•   8  ft. 
6  ft. 

Extra  Java 

1.60 

102 

Extra  Java 

2.00 

200 

Extra  Java 

2  25 

279 

Rawhide 

3  00 

287 

Rawhide 

7  50 

312 

Rawhide 

9  00 

428 

Whalebone 

4.75 

455 

6ift. 

Whalebone 

6.60 

530 

6ift. 

Whalebone 

30.00 

617 

7  ft. 

Whalebone 

35.00 

688 

7  ft. 

Knotted  Bone 

160.00 

English  Crops 

18  00 

874 

3ift. 

Rawhide  Extra  Team 

5.76 

1017 

5  ft. 
12  ft. 

Horsehide  Lasli 

1  50 

1079 

8-plat  Buck  Lash 

18  00 

The  total  amount  of  each  invoice  purchased  will  be  given,  and  there- 
fore no  buying  price  list  is  required. 

The  Object  of  this  set  is  to  illustrate  corporation  bookkeeping,  as 
applied  to  manufacturing  interests,  including  the  organization  of  a 
corporation,  and  the  opening,  the  conducting,  and  the  closing  of  a  set  of 
corporation  books. 

The  Special  Features  of  this  set  are  the  classification  of  the  Merchandise 
and  Expense  accounts. 

As  the  student  has  been  given  extensive  work  in  business  practice  in 
the  preceding  sets  and  is  now  familiar  with  the  various  forms  used  in 
business,  this  set  presents  the  theory  of  manufacturing  bookkeeping. 

The  voucher  system  is  sometimes  used  in  general  corporation  book- 
keeping. This  set  does  not  attempt  to  illustrate  this  system ;  however,  it 
is  explained  and  illustrated  in  the  preceding  pages.  Both  the  instructor 
and  the  student  should  give  careful  attention  to  this  explanatory 
statement. 

313 


314 


BOOKKEEPIKG 


Manufacturing 


ACCOUNT 

SALES  LEDGER 

TO  BE  CREDITED 

MDSE. 
DISC.  DR. 

NET 
CASH 

ACCTS. 
REC. 

Feb. 

1 
5 

s/ 

Capital  Stock 
Mdse. 

Investment 
C.W.Allen,  30  sh.  3000 
A.B.Curtis,  25"  2500 
B.  E.  Frey,  35  "  3500 
\  doz.  #  346 

9 

50 

9000 

8 

E.  W.  Blaser 

Inv.  2/3,  less  2% 

5 

60 

274 

40 

280 

12 

V 

Mdse. 

^  doz.  #510 

7 

20 

16 

F.  E.  Simpson 

lnv.2/^^,]ess2% 

3 

52 

172 

38 

175 

90 

24 

W.  W.  Merrill 

Inv.2/^g,less2% 

5 

50 

269 

50 

275 

25 

Bills  Rec. 

W.  W.  Snow's  note 

500 

25 

V 

Mdse. 

|doz.  #60G 

8 

50 

14 

62 

716 

28 

7.30 

90 

.~25" 

"20" 

28 

Accts.  Rec. 

Total  for  month 

730 

90 

28 

Mdse.  Discounts 

Contra, on  purchases 

39 

97 

28 

Mdse. 

Petty  cash  sales 

25 

20 

^^ 

10296 

07 

' 

Invoice 


fNV. 
NO. 

DATE 

F 

NAME  AND  ADDRESS 

TERMS 

AMOUNT 

1 
2 
3 
4 
5 
6 
7 
8 
9 

Feb. 

1 
4 
4 
2 
5 
9 
12 
18 
17 

17 
18 
14 
13 
17 
12 
14 
15 
16 

Merrill  &  Co.                            New  York 
Fleming  &  Deming                  Boston,  Mass. 
Gray  &  Dunkle                       New  York 
Brown  &  Son                            Boston,  Mass. 
Merrill  &  Co.                           New  York 
C.  W.  Hall                                 New  York 
Coates  &  Son                            Buffalo,  N.Y. 
Bender  &  Hill                         Philadelphia 
C.  H.  Shaw  Co.                        New  York 

Accts.  Pay.  (Cr.) 

The  posting  of  the  special  columns  is  indi- 
cated by  the  small  figures  in  parenthesis. 

2/10,  net  30  days 

2/10,  net  60  days 

V30 

VlO 

2/10,  net  30  days 

1/10,  net  30  days 

1/10,  net  30  days 

2/30,  net  60  days 

Net  60  days 

125 

420 
325 
900 
725 
182 
72 
100 
462 

90 
40 
60 
10 

50 
50 

90 

10 

3314 

90 

SET  VIII.   MANUFACTURING 


315 


Cashbook 


F 

ACCOUNT 
TO  BE  DEBITED 

EXPLANATION 

PURCHASE  LEDGER 

MDSE. 
DISG.CR. 

NET  CASH 

ACCTS. 
PAY. 

Feb. 

3 
3 

Mdse. 

Whalebone 

Rawhide 

Trimmings 

Paints  and  Oils 

Agents'  Salaries 

Insurance 

Finished  stock  bought 
Raw  material  bought 
Raw  material  bought 
Raw  material  bought 
Raw  material  bought 
Traveling  exp.  adv. 
2%  prm.  on  pol.  No.  791 

1200 
400 
750 
120 
150 
120 
75 

90 

7 

Mason  &  Co. 

Inv.2/2,less3% 

7 

20 

232 

80 

240 

12 

Simpson  &  Smith 

Inv.  2/5,  less  3% 

21 

679 

700 

13 

Labor 

Pay  roll 

430 

16 

Lapham  &  Snow 

Inv.  2/7,  less  3% 

3 

97 

100 

19 

Bills  Pay. 

Favor  E.  Wells 

240 

19 

Interest 

On  above 

2 

43 

21 

C.  B.  Mayhew  &  Son 

Inv.  2/j^,  less  1% 

1 

27 

125 

G3 

126 

90 

24 

Osgood  &  Bedell 

Inv.2/jj.,  less  2% 

1 

50 

73 

50 

75 

2G 

Expense 

Per  petty  cashbook 

10 

90 

27 

Simpson  &  Smith 

Inv.  2/2^,  less  3% 

6 

194 

200 

27 

Expense 

Per  petty  cashbook 

12 

40 

39 

97 

1401 

93 

1441 

90 

28 

Accts.  Pay. 

Total  for  month 

1441 

90 

28 

Mdse.  Discounts 

Contra,  on  sales 

14 

62 

28 

= 

Balance 

In  hank 

=r- 

= 

5321 

95 

lo?nfi 

07 

Register 


DISTRIBUTION 

' 

WHALE- 
BONE 

RAW- 
HIDE 

WOOD 
BUTTS 

REEDS 

THREAD 

TRIM- 
MINGS 

PAINTS 
AND 
OILS 

HARD- 
WARE 

LEATHER 

AND 
CLOTH 

PAID 

DIS- 
COUNT 

CASH 

125 

90 

Feb. 

8 

2 

52 

123 

38 

420 

40 

725 

325 

60 

182 

50 

72 

50 

462 

90 

100 

900 

10 

12 

22 

14 
15 

8 
3 

14 

41 
26 

50 

73 

411 
322 

710 

71 

99 
34 

50 

77 

(4) 

(3) 

(6) 

(3) 

(9) 

(4) 

(5) 

(7) 

(8) 

430 

40 

725 

325 

CO 

182 

50 

72 

50 

462 

90 

125 

90 

100 

900 

10 

316  BOOKKEEPING 

The  Books  used  in  tliis  set  are  the  journal,  the  cashbook,  the  petty 
cashbook,  the  invoice  register,  the  sales  book,  the  general  ledger,  the 
sales  ledger,  and  the  purchase  ledger.  With  the  exception  of  the  cash- 
book,  the  petty  cashbook,  and  the  invoice  register,  the  books  are  the 
same  as  those  used  in  the  preceding  sets  of  this  text. 

Cashbook.  The  cashbook  is  provided  with  special  columns  for  accounts 
receivable,  accounts  payable,  and  merchandise.  These  columns  are  simi- 
lar to  those  of  the  cashbooks  used  in  Sets  VI  and  VII.  In  addition  to 
columns  for  net  cash  and  discount^  a  column  is  provided  for  accounts  re- 
ceivable and  accounts  payable.  These  columns  record  the  amounts  that 
are  to  be  posted  to  the  sales  ledger  and  the  purchase  ledger  respectively, 
and  the  totals  of  these  columns  indicate  the  amounts  to  be  posted  to  the 
general  ledger,  when  the  books  are  closed.  The  special  column  for 
merchandise  on  the  left  side  is  for  recording  cash  sales.  Refer  to  the 
model  cashbook,  pages  314  and  315. 

A  Controlling  Account  is  an  account  kept  in  the  general  ledger  for  the  purpose  of 
proving  the  accuracy  of  some  subsidiary  record. 

Accounts  Receivable  and  Accounts  Payable  are  illustrations  of  controlling  accounts, 
as  they  prove  the  correctness  of  the  sales  ledger  and  the  purchase  ledger. 

Petty  Cashbook.  This  book  is  used  for  recording  small  expenditures 
of  cash.  The  ruling  of  an  ordinary  journal  page  is  a  form  of  a  petty 
cashbook.  All  receipts  are  to  be  placed  in  the  first  money  column  and 
all  payments  in  the  second  money  column.  Special  columns  may  be  used 
if  desired.    The  form  of  the  petty  cashbook  is  illustrated  on  page  321. 

Invoice  Register.  The  invoice  register  is  not  essentially  different 
from  the  purchase  book  Avith  which  the  student  is  already  familiar.  In 
a  manufacturing  business  it  is  desirable  that  the  cost  of  the  various 
manufacturing  products  be  kept  in  separate  accounts  in  the  ledger. 
This  necessitates  the  addition  of  a  number  of  special  columns  in  the 
invoice  register  for  the  proper  distribution  of  all  raw  material  bought. 
When  an  invoice  is  received  it  is  audited  and  entered  in  the  invoice 
register.  The  first  part  of  the  record  is  the  same  as  that  of  the  ordinary 
purchase  book.  After  this  part  of  the  record  is  complete,  the  amount 
of  the  purchase  is  carried  to  the  proper  distributing  column.  In  this 
set  the  purchasers  are  credited  weekly  for  the  amount  of  the  invoice, 
and  at  the  end  of  the  month  Accounts  Payable  is  credited  for  the  total 
of  the  amount  column.  Instead  of  debiting  Merchandise,  as  is  done  when 
the  ordmary  purchase  book  is  used,  each  of  the  articles  used  in  manu- 
facturing should  have  a  separate  account  under  the  names  appearing  at 
the  heads  of  the  several  columns.  Care  should  be  taken  to  check  prop- 
erly all  items  posted.    (See  model  on  pages  314  and  315.) 


SET  VIIL   MANUFACTURING  317 

Memoranda  of  Transactions 
February  1 

J.  W.  Melton,  E.  M.  Williams,  Geo.  Inman,  A.  P.  Zaner,  and 
L.  H.  Messier,  of  Springfield,  Mass.,  have  decided  to  form  a  corporation, 
under  the  title  of  the  Union  Whip  Co.,  for  the  purpose  of  manufacturing 
whips.  Certificates  of  incorporation  have  this  day  been  filed  with  the 
proper  state  official.  The  capital  stock  is  to  be  1 25,000,  divided  into 
250  shares  of  the  par  value  of  |100  each.  Each  of  the  incorporators 
has  subscribed  for  50  shares  of  stock. 

This  corporation  has  been  formed  under  the  laws  of  the  Common- 
wealth of  Massachusetts.  The  stockholders  named  above  are  to  con- 
stitute the  board  of  directors  for  one  year.  The  following  officers  have 
been  elected :  Geo.  Inman,  President ;  L.  H.  Messier,  Secretary ;  J.  W. 
Melton,  Treasurer. 

To  THE  Student.   The  above  memorandum  is  to  be  copied  in  the  journal. 

The  student  has  been  chosen  to  act  as  bookkeeper  for  the  corpora- 
tion, at  a  salary  of  |60  per  month. 

Each  stockholder  has  paid  the  following :  J.  W.  Melton,  for  50  shares, 
15000;  E.  M.  Williams,  for  50  shares,  |5000;  Geo.  Inman,  for  50 
shares,  $5000 ;  A.  P.  Zaner,  for  50  shares,  |5000 ;  L.  H.  Messier,  for 
50  shares,  15000. 

Make  the  proper  entry  in  the  cashbook  for  the  investment. 

The  Springfield  Whip  Co.  has  decided  to  go  out  of  business  and  The 
Union  Whip  Co.  has  taken  a  lease  of  its  factory  for  a  term  of  three 
years,  at  a  yearly  rental  of  |1800,  the  rent  to  be  paid  monthly. 

Copy  the  above  memorandum  in  the  journal. 

Deposit  in  the  First  National  Bank  all  the  cash  on  hand  except  |50. 

Use  a  sheet  of  journal  paper  for  recording  all  deposits  made  and  all  checks  drawn. 
Use  the  first  money  column  for  recording  the  deposits  and  the  second  money  column 
for  recording  the  checks. 

The  $50  kept  on  hand  is  to  be  entered  as  a  balance  in  the  petty  cashbook.  (See 
the  first  entry  in  the  model  petty  cashbook,  page  321.) 

February  3 

The  following  purchases  are  made  of  the  Springfield  Whip  Co.  : 
Machinery  and  equipment,   $9500 ;   raw  material  on  hand,   |2000 ; 
finished  goods  ready  for  market,  |1500. 


318  BOOKKEEPING 

Give  the  Springfield  Whip  Co.  a  check  for  the  above  amounts.  Enter 
in  the  cashbook,  debiting  the  following  accounts : 

Machinery  for  machinery  and  equipment. 

Merchandise  for  the  amount  of  the  finished  goods. 

Each  of  the  following  accounts  for  the  raw  material : 
Whalebone,  $200  Rawhide,  |200 

Reeds,  flOOO  Thread,  $250 

Sundries,  $40  Trimtnings,  $110 

Paints  and  Oils,  $100  Hardware,  $50 

Leather  and  Cloth,  $50 

S.  B.  Hardy  and  F.  M.  Kinney  have  been  employed  as  traveling 
salesmen,  each  to  receive  a  salary  of  $100  per  month  and  traveling 
expenses. 

Give  each  of  the  traveling  salesmen  a  check  for  $150,  and  charge  the 
amount  to  Agents''  Salaries. 

Extend  into  the  General  column  in  the  cashbook. 

Mr.  A.  C.  Parker,  attorney,  was  the  legal  adviser  of  the  company  at 
the  time  of  incorporation ;  give  him  a  check  for  $50  for  his  services. 

Charge  Expense. 

The  company  has  taken  out  an  additional  insurance  policy  with  the 
Niagara  Insurance  Co.  for  $5000.  Owing  to  the  location  of  the  factory 
and  the  combustible  material  used,  the  rate  of  insurance  is  $20  per 
thousand. 

Give  the  agent  of  the  Niagara  Insurance  Co.,  Henry  Lete,  a  check  for  the  amount 
of  the  premium  at  the  rate  named.    Charge  Insurance. 

February  5 

Give  Connor  &  Co.  a  check  for  $32.50  in  payment  of  their  bill  for  a 
set  of  office  books. 
Charge  Expense. 

Pay  Tuller  &  Co.  $7.85  in  cash  for  office  stationery. 

Enter  this  item  in  the  petty  cashbook  under  Expense.  Refer  to  the  model  on 
page  321. 

Note.  Items  that  are  entered  in  the  petty  cashbook  are  not  entered  in  the  regular 
cashbook  until  the  petty  cashbook  is  closed.  This  will  be  explained  at  the  end  of  the  week. 

Buy  $2  worth  of  postage  stamps  and  pay  cash  for  them. 
Enter  in  the  petty  cashbook. 


SET  VIII.   MANUFACTURING  319 

Pay  Thos.  Lottridge  |2.80  in  cash  for  carpenter  work  in  repairing 
the  office. 

Sell  Wm.  Lane  for  cash  1  doz.  whips  #287,  |7.50. 
Enter  in  the  main  cashbook,  crediting  Merchandise. 

February  6 

The  following  goods  have  been  received:  Invoice  of  thread  from 
Hasson  &  Son,  Boston,  Mass.,  dated  Feb.  4.  Terms :  1/10,  net  30  da. 
Amount,  |100. 

Invoice  of  trimmings  from  Fleming  &  Co.,  New  York,  dated  Feb.  5. 
Terms:  2/10,  net  30  da.    Amount,  |60. 

Invoice  of  reeds  from  Kellar  &  Co.,  New  York,  dated  Feb.  3.  Terms : 
1/10,  net  30  da.    Amount,  |250. 

The  preceding  items  are  to  be  entered  in  the  invoice  register.  Refer  to  the  model 
on  pages  314  and  315.   Be  sure  that  the  amounts  are  extended  into  the  proper  columns. 

Note.  In  recording  invoices  the  date  of  the  invoice  should  be  used,  and  not  the  date 
under  which  the  student  is  working. 

The  following  orders  have  been  received  and  filled.  Terms:  2/10, 
net  30  da.,  F.O.B.,  Springfield,  Mass. 

F.  R.  Pickles,  Reading  : 

6  doz.  #30  12  doz.  #37 

5  doz.  #60  8  doz.  #102 

10  doz.  #200 
D.  D.  Miller,  Moberly : 

12  doz.  #279  10  doz.  #428 

15  doz.  #1017  1  doz.  #312 

2  doz.  #455  2  doz.  #287 

H.  S.  Blower,  Palmer : 

^  doz.  #530  1  doz.  #455 

\  doz.  #617  \  doz.  #688 

S.  D.  Merrill,  Canton : 

10  doz.  #200  10  doz.  #37 

10  doz.  #279  20  doz.  #102 

20  doz.  #60  2  doz.  #287 

15  doz.  #30  2  doz.  #428 

A.  C.  Cotton,  Albany : 

^  doz.  #1079  ^  doz.  #530 

10  doz.  #1017  1  doz.  English  Crops 

D.  M.  Heath,  Worcester : 

10  doz.  #279  10  doz.  #200 

2  doz.  #874 
Enter  these  orders  in  the  sales  book. 


320 


BOOKKEEPING 


The  names  of  the  persons  employed  in  the  factory,  and  the  weekly 
salary  of  each,  are  given  below : 


Arthur  Daley,  foreman 

$18 

W.  P.  Nye 

*14 

David  Brown,  foreman 

18 

H.  C.  Wayne 

9 

John  Sauter 

14 

Maurice  Fox 

12 

Elmer  Tierney 

11 

W.  V.  Young 

13 

Silas  Willis 

9 

Daniel  Gilbert 

10 

Theo.  Nash 

12 

D.  B.  Hinman 

11 

Benj.  Lever 

15 

Leon  Craig 

14 

Wm.  Kenney 

13 

E.  M.  Ward 

10 

Leslie  Carton 

10 

T.  B.  Murray 

15 

0.  H.  Sidney 

12 

Jas.  Brigham 

9 

Howard  Goble 

11 

Alice  Benton 

7 

Geo.  Wirtz 

9 

Mary  Anson 

6 

Wesley  Kress 

12 

Susan  Frye 

8 

Edward  Short 

13 

Sarah  Harum 

8 

Thos.  Wallace 

11 

Ellen  Steele 

6 

Jacob  McVey 

10 

Jessie  Day 

9 

Kichard  Evans 

13 

Ida  Bowers 

7 

Isaac  Shaw 

15 

Cora  Kellar 

7 

Henry  Utz 

11 

Ada  Weet 

8 

Erank  Boler 

10 

Edith  Noyes 

9 

Draw  a  cash  check  for  the  total  amount  of  the  pay  roll. 

The  Pay  Roll.  A  form  of  pay  roll  is  given  below.  These  forms  differ 
widely  in  different  lines  of  business.  Payments  of  employees  are  usually 
made  by  placmg  in  an  envelope  the  amount  to  be  paid.  The  amount 
due  each  employee  is  made  up  after  the  conclusion  of  a  week's  work, 
and  payment  is  made  as  soon  as  the  pay  roll  can  be  completed.  The 
total  amount  that  has  been  placed  in  these  envelopes  is  drawn  from 
the  bank  by  a  cash  check. 

As  no  business  forms  are  being  used  in  this  set  the  student  will  record  simply 
the  amount  of  the  pay-roll  check  in  the  main  cashbook,  General  column,  under  Labor. 


Time  for  Week  ending- 


19- 


NAME 


TIME 


RATE  PER         AMOUNT  PAID 
DAY  $  CTS, 


RECEIVED  PAYMENT 


SET  VIII.   MANUFACTURING 


321 


Close  the  petty  cashbook  in  the  manner  indicated  in  the  outline 
given  below: 

Petty  Cashbook 


Feb.  1 
5 
5 
5 
6 

n/ 
n/ 
n/ 

Balance                            Brought  forward 
Expense                           Office  stationery 
Expense                            Postage 
Expense                           Carpenter  work 
Balance                             In  safe 

Balance                            Brought  down 

50 

7 

2 

2 

37 

85 

80 
35 

50 

00 

,       50 

00 

Feb.  8 

37 

35 

After  closing  the  petty  cashbook  carry  the  sum  of  the  three  Expense 
items  to  the  main  cashbook.  Record  in  the  General  column.  Check  all 
items  transferred.  This  finishes  the  work  of  closing  and  transferring 
the  items  in  the  petty  cashbook. 

None  of  the  other  books  are  to  be  closed,  but  the  amounts  are  to  be  posted  to 
the  different  ledgers. 

Space  in  the  Different  Ledgers.  The  first  account  in  the  general  ledger 
is  Capital  Stock ;  allow  eight  lines  for  this  account,  and  the  remainder 
of  the  page  may  be  allowed  for  the  Merchandise  account.  On  page  2, 
allow  one  half  the  page  for  the  Expense  account ;  and  for  each  remaining 
account  allow  one  fifth  of  a  page  in  the  main  ledger. 

Allow  one  fifth  of  a  page  for  each  account  in  the  purchase  ledger  and 
the  sales  ledger. 

Posting.  Post  all  the  items  in  the  General  column  of  the  main  cash- 
book  to  the  general  ledger ;  post  all  the  items  from  the  sales  book  to  the 
sales  ledger;  post  all  the  items  in  the  Amount  column  of  the  invoice 
register  to  the  purchase  ledger,  credit  side.  This  concludes  the  work 
for  one  week. 

February  8 

The  following  have  been  received:  Invoice  of  paints  and  oils  from 
Leland  &  Son,  Boston,  Mass.,  dated  Feb.  6.  Terms:  1/10,  net  30  da. 
Amount,  154.20. 

Invoice  of  leather  and  cloth  from  Palmer  and  Brown,  New  York,  dated 
Feb.  6.    Terms:  1/10,  net  30  da.    Amount,  |80.50. 

Give  the  Springfield  Whip  Co.  a  check  for  one  month's  rent. 

For  the  amount  consult  the  memorandum  in  the  journal. 
Enter  in  the  cashbook  under  Fuel,  Light,  and  Rent. 

Sell  Geo.  Provo  1  doz.  #312,  for  cash. 
Enter  in  the  main  cashbook. 


322  BOOKKEEPIlSrG 

February  10 

Send  each  of  the  following  persons  a  check  in  payment  of  the  invoice 
named : 

Hasson  &  Son,  for  the  invoice  dated  Feb.  4,  less  discount. 
Kellar  &  Co.,  for  the  invoice  of  Feb.  3,  less  discount. 

Enter  each  payment  in  the  main  cashbook.  A  reference  to  the  model  on  page  315 
will  give  all  needed  suggestions. 

Pay  50(^  in  cash  for  a  telegram  sent  to  S.  B.  Hardy,  one  of  the  traveling 
salesmen. 

Enter  in  the  petty  cashbook. 

Checks  have  been  received  from  the  following  persons : 
F.  R.  Pickles,  for  the  invoice  of  Feb.  6,  less  discount. 
H.  S.  Blower,  for  the  invoice  of  Feb.  6,  less  discount. 
A.  C.  Cotton,  for  the  invoice  of  Feb.  6,  less  discount. 

Enter  each  amount  in  the  main  cashbook.    See  the  model  on  page  314. 

The  following  orders  have  been  received  and  filled.    Terms:  2/10, 
net  30  da. 

E.  T.  Fuller,  Leland : 

12  doz.  #30  24  doz.  #37 

10  doz.  #60  16  doz.  #102 

20  doz.  #200  10  doz.  #428 

1 
C.  C.  Dewey,  Bristol :  \ 

24  doz.  #279  20  doz.  #428 
30  doz.  #1017  2  doz.  #312  ; 

4  doz.  #455  4  doz.  #287 

Henry  Lee,  Norwich : 

1  doz.  #530  2  doz.  #455 

1  doz.  #617  i  doz.  #688 


February  12 

The  following  orders  have  been  received  and  filled.    Terms:  2/10, 
net  30  da. 

A.  B.  Smith,  Hartford  : 

20  doz.  #200  20  doz.  #37 

15  doz.  #279  •    35  doz.  #102 

25  doz.  #60  4  doz.  #287 

30  doz.  #30  10  doz.  #428 


SET  VIII.   MANUFACTURING  323 

Geo.  H.  Sanford,  Lynn : 

1  doz.  #1079  1  doz.  #530 

20  doz.  #1017  2  doz.  English  Crops 

Terms :  subject  to  sight  draft,  for  the  following  invoice : 

F.  M.  Caswell,  City : 

25  doz.  #279  20  doz.  #200 

4  doz.  #874 

February  13 

Send  Fleming  &  Co.  a  check  in  payment  of  the  invoice  dated  Feb.  5, 
less  discount. 

D.  D.  Miller  sends  his  check  in  payment  of  the  invoice  dated  Feb.  6, 
less  discount. 

H.  C.  Wayne  and  T.  B.  Murray  have  been  absent  the  past  week  on 
account  of  sickness.  Deduct  the  amount  of  their  salaries  from  the  total 
pay  roll  of  last  week. 

Draw  a  cash  check  for  the  amount  of  the  weekly  pay  roll. 

Deposit  all  the  checks  on  hand  and  the  currency  received  from  the 
cash  sales  on  Feb.  5  and  8 ;  collection  on  the  checks,  85(f. 

Debit  Expense  for  all  collection  charges  in  this  set.  Enter  in  the  main  cashbook, 
as  this  is  not  a  currency  item. 

Close  the  petty  cashbook  and  carry  the  amounts  to  the  main  cashbook. 

Post  the  week's  work.  The  items  in  the  Accounts  Receivable  column 
of  the  main  cashbook  are  to  be  posted  to  the  sales  ledger,  and  the  items 
in  the  Accounts  Payable  column  are  to  be  posted  to  the  purchase  ledger. 
Open  accounts  with  all  new  names  that  appear  in  the  invoice  register  and 
the  sales  book. 

February  15 

Send  each  of  the  following  a  check  in  payment  of  the  invoice  named : 

Leland  &  Son,  for  the  invoice  of  Feb.  6,  less  discount. 

Palmer  &  Brown,  for  the  invoice  of  Feb.  6,  less  discount. 
Checks  have  been  received  from  the  following  persons : 

S.  D.  Merrill,  for  the  invoice  of  Feb.  6,  less  discount. 

D.  M.  Heath,  for  the  invoice  of  Feb.  6,  less  discount. 
Pay  cash  for  petty  expense  items,  |2.50. 

The  following  orders  have  been  received  and  filled.  Terms:  2/10, 
net  30  da. 

F.  R.  Pickles,  Reading : 

8  doz.  #1017  10  doz.  #287 

6  doz.  #428  10  doz.  #455 


324  BOOKKEEPING 

D.  D.  Miller,  Moberly  : 

20doz.  #30  18doz.  #102 

15  doz.  #37  14  doz.  #200 

20  doz.  #60  2  doz.  #312 
H.  S.  Blower,  Palmer : 

18  doz.  #1017  20  doz.  #200 

10  doz.  #428  12  doz.  #37 

6  doz.  #279  5  doz.  #287 

Draw  a  cash  check  for  |16.50,  and  record  the  amount  in  the  petty 
cashbook. 

February  16 

The  following  have  been  received:  Invoice  of  whalebone  from  Ran- 
dall &  Co.,  New  York,  dated  Feb.  13.  Terms:  net  10  da.  Amount, 
♦106.20. 

Invoice  of  rawhides  from  Stockwell  &  Co.,  Boston,  Mass.,  dated 
Feb.  12.    Terms:  2/10,  net  30  da.    Amount,  $124.35. 

Invoice  of  wood  butts  from  Eaton  &  Son,  New  York,  dated  Feb.  13. 
Terms:  1/10,  net  30  da.    Amount,  $62.50. 

Advance  the  bookkeeper  $20  in  cash,  to  apply  on  his  monthly  salaiy. 

Enter  in  the  petty  cashbook  under  Salaries. 

February  17 

The  following  orders  have  been  received  and  filled.  Terms:  2/10, 
net  30  da. 

A.  C.  Cotton,  Albany : 

10  doz.  #102  5  doz.  #874 

20  doz.  #1017  3  doz.  #287 

4  doz.  #455  20  doz.  #60 
D.  M.  Heath,  Worcester : 

22  doz.  #30  5  doz.  #287 

18  doz.  #60  4  doz.  #874 

12  doz.  #1017  2  doz.  #1079 

Pay  J.  K.  Hart  cash,  for  plumbing  and  other  repairs,  |8.75. 
Enter  in  the  petty  cashbook  under  Expense. 

February  18 

Give  the  Home  Printing  Co.  a  check  in  payment  of  a  printing  bill, 
$43.65. 

Enter  in  the  main  cashbook  under  Printing  and  Advertising. 


SET  VIIL  MANUFACTURING  325 

Checks  have  been  received  from  the  following  persons : 

E.  T.  Fuller,  for  the  invoice  of  Feb.  10,  less  discount. 

Henry  Lee,  for  the  invoice  of  Feb.  10,  less  discount. 

C.  C.  Dewey,  for  the  invoice  of  Feb.  10,  less  discount. 

A.  B.  Smith,  for  the  invoice  of  Feb.  12,  less  discount. 
Give  Scott  &  Co.  a  check  in  payment  of  their  bill  for  boxes,  etc., 
*32.90. 

Enter  in  the  main  cashbook  under  Shipping. 

February  19 

The  following  orders  have  been  received  and  filled.  Terms:  2/10, 
net  30  da. 

Horace  M.  Hatton,  New  York : 

50  doz.  #102  100  doz.  #1017 

20  doz.  #312  100  doz.  #30 

40  doz.  #200  50  doz.  #37 
D.  K.  Nelson,  Boston  : 

20  doz.  #428  15  doz.  #312 

10  doz.  #455  40  doz.  #102 

12  doz.  #287  50  doz.  #60 
A.  C.  Bruner,  Providence : 

^  doz.  #688  4  doz.  #874 

2  doz.  #1079  2  doz.  #530 

1  doz.  #617  25  doz.  #279 

February  20 

Buy  of  Eureka  Coal  Co.  15  T.  coal  at  |4.50  per  ton.  Give  in  pay- 
ment a  sight  draft  on  F.  M.  Caswell  for  the  amount. 

Enter  in  the  main  cashbook  as  follows :  on  the  right  side,  Fuel,  Light,  and  Rent, 
and  extend  into  the  General  column  ;  on  the  left  side,  F.  M.  Caswell,  and  extend  into 
the  Accounts  Receivable  and  Net  Cash  columns.  ^ 

Note.  The  above  entry  debits  Expense  and  credits  F.  M.  Caswell,  which  accomplishes 
the  same  end  as  a  journal  entry.  As  the  same  amount  is  entered  on  each  side  of  the 
cashbook  the  balance  of  cash  is  not  affected. 

February  20 

The  following  order  has  been  received  and  filled.  Terms:  note  at 
30  da.,  with  interest. 

W.  G.  Cooper,  Westfield : 

20  doz.  #37  30  doz.  #102 

20  doz.  #60  20  doz.  #1017 


326  BOOKKEEPING 

Enter  the  preceding  item  in  the  sales  book  in  the  regular  way,  and  then  make 
the  required  journal  entry.    (Credit  Accounts  Receivable.) 

Note.  It  is  necessary  to  make  a  double  posting  of  the  credit  in  this  entry,  as  follows  : 
after  crediting  Accounts  Receivable  in  the  main  ledger,  credit  W.  G.  Cooper  in  the  sales 
ledger. 

Give  a  cash  check  for  the  weekly  pay  roll.    All  the  help  have  been 
employed  this  week.    Deposit  all  the  checks  on  hand ;  collection,  |2. 
Close  and  post  the  petty  cashbook.    Post  the  week's  work. 

February  24 

Checks  have  been  received  from  the  following  persons : 

F.  R.  Pickles,  for  the  invoice  of  Feb.  15,  less  discount. 
D.  D.  Miller,  for  the  invoice  of  Feb.  15,  less  discount. 
H.  S.  Blower,  for  the  invoice  of  Feb.  15,  less  discount. 
The  following  have  been  ^received :  Invoice  of  thread  from  Hasson  & 
Son,  Boston,  Mass.,  dated  Feb.  23.    Terms :  1/10,  net  30  da.    Amount, 
♦200. 

Invoice  of  trimmings  from  Fleming  &  Co.,  New  York,  dated  Feb.  23. 
Terms:  2/10,  net  30  da.    Amount,  |75. 

Invoice  of  paints  and  oils,  |75 ;  hardware,  $50,  from  Leland  &  Son, 
Boston,  Mass.,  dated  Feb.  23.    Terms:  1/10,  net  30  da. 

Extend  the  sum  of  the  two  invoices  into  the  Amount  column  in  the  invoice  register, 
and  then  extend  the  separate  amounts  into  the  proper  distributing  columns. 

Invoice  of  leather  and  cloth  from  Palmer  &  Brown,  New  York,  dated 
Feb.  21.    Terms,  1/10,  net  30  da.    Amount,  $64.35. 

Invoice  of  reeds  from  Kellar  &  Co.,  New  York,  dated  Feb.  20. 
Terms:  1/10,  net  30  da.    Amount,  $1160. 

Invoice  of  wood  butts  from  Eaton  &  Son,  New  York,  dated  Feb.  23. 
Terms:  1/10,  net  30  da.    Amount,  $43.25. 

Invoice  of  whalebone  from  Randall  &  Co.,  New  York,  dated  Feb.  20. 
Terms :  10  da.    Amount,  $145. 

Invoice  of  rawhides  from  Stockwell  &  Co.,  Boston,  Mass.,  dated 
Feb.  21.    Terms:  2/10,  net  30  da.    Amount,  $165.40. 

February  25 
The  following  orders  have  been  received  and  filled.    Terms:  2/10, 
net  30  da. 

C.  C.  Dewey,  Boston : 

50  doz.  #102  30  doz.  #30 

40  doz.  #60  12  doz.  #874 


SET  VIII.   MANUFACTURmG  327 

A.  B.  Smith,  Hartford  : 

100  doz.  #102  100  doz.  #1017 

60  doz.  #200  10  doz.  #874 

25  doz.  #279  20  doz.  #428 

Geo.  H.  Sanford,  Lynn  : 

60  doz.  #30  15  doz.  #874 

80  doz.  #60  5  doz.  #312 

20  doz.  #279  5  doz.  #530 

F.  M.  Caswell,  City : 

12  doz.  #287  40  doz.  #60 

20  doz.  #428  20  doz.  #37 

50  doz.  #102  50  doz.  #30 

Henry  Lee,  Norwich : 

70  doz.  #30  100  doz.  #1017 

50  doz.  #60  40  doz.  #200 

60  doz.  #37  8  doz.  #428 


February  27 

Received  from  C.  C.  Dewey  a  check  in  payment  of  the  invoice  of 
Feb.  25,  less  discount. 

February  27 

Checks  have  been  issued  in  payment  of  the  following : 

Student,  balance  on  salary  |40 

Chas.  M.  Bradburn,  superintendent  100 

Enter  these  items  in  the  main  cashbook,  under  Salaries. 

Checks  have  been  sent  to  the  following : 

S.  B.  Hardy,  traveling  salesman  $100 

F.  M.  Kinney,  traveling  salesman  100 

Enter  these  items  in  the  main  cashbook,  under  Agents'  Salaries. 

Issue  a  cash  check  for  the  full  amount  of  the  pay  roll. 
Give  the  Metropolitan  Carting  Co.  a  check  for  $135,  in  payment  for 
freight  and  cartage  for  the  month. 

Enter  in  the  main  cashbook  under  Freight  and  Cartage. 

Give  the  City  Gas  Co.  $22.10  in  cash,  for  bill  to  date. 
Enter  in  the  petty  cashbook  under  Fuel,  Light,  and  Rent. 

Deposit  all  checks  on  hand;  collection,  $1.75. 


328 


BOOKKEEPING 


Statement  of  Losses  and 


1531. 

5.80 


Mdse.  finished  goods  purchased 

Materials : 

Whalebone  340 

Whalebone,  inv.  _120       220. 

Rawhide  320 

Rawhide,  inv.  ^120       200. 

Wood  Butts  ^85 

Wood  Butts,  inv.  _^         62. 

Reeds  1600 

Reeds,  inv.  ^810       790. 

Thread  "365 

Thread,  inv.  106       259. 

Material  cost 

Less  Mdse.  Disc,  on  purchases 
In  freight,  1/2  Fr't  and  Cartage 

Labor 

Balance  carried  down,  gross  profit  on  sales 

Manufacturing  Expense : 

Fuel,  Light,  and  Rent  210. 

Fuel,  Light,  and  Rent,  inv.  40. 

Official  Salaries 

Insurance  .  80. 

Insurance,  inv.  68. 

Balance  carried  down 

Selling  Expense  : 

Printing  and  Advertising  39.50 

Printing  and  Advertising,  inv.  9.25 

Agents'  Salaries 

Shipping  24.10 

Shipping,  inv.  8. 

Freight  and  Cartage,  1/2 

Balance  carried  down 

General  Expense 
Net  Gain 


1200 


1525 
41 

840 


170 
100 

12 


30 
250 

16 
41 


20 


25 


10 


3606 
846 


4452 


20 
40 


60 


282 
564 


846 


337 


564 


74 
152 


227 


40 


40 


35 

05 


40 


50 
55_ 
05    1 


Close  the  petty  cashbook  and  carry  the  item  to  the  main  cashbook. 
Post  the  week's  work. 


Present  all  books  to  the  instructor  for  inspection.    If  they  are  approved  by  him, 
proceed  to  close  the  books  as  follows : 


SET  VIII.   MANUFACTURING 


329 


Gains,  February  27,  19 — 


Mdse.  sales 

Less  Mdse.  Disc,  on  sales 
Manufactured  goods  on  hand 


3560. 
32.40 


Balance  brought  down,  gross  profit  on  sales 


Balance  brought  down 


Balance  brought  down 


3527 
925 


60 


4452 


4452 


846 


846 


564 


564 


227 


227 


60 


60 


40 


40 


40 


40 


05 


05 


Close  the  main  cashbook.  Consult  the  model  cashbook  on  pages  314 
and  315.  The  discount  columns  are  termed  contra  columns.  The  mean- 
ing is  this :  The  discount  on  the  left  side  of  the  cashbook  is  a  debit ;  but 
it  is  placed  there  for  convenience.    By  this  arrangement  the  discount,  the 


330  BOOKKEEPlKa 

net  cash,  and  the  total  of  any  invoice  paid  are  shown  together.  The 
same  explanation  applies  to  the  discount  column  on  the  right  side  of 
the  cashbook.  This  column  represents  a  credit.  The  footing  of  the  dis- 
count column  on  the  left  side  is  carried  to  the  summary  on  the  right 
side.  The  footing  of  the  column  on  the  right  side  is  carried  to  the 
summary  on  the  left  side.  This  places  each  footing  in  its  proper  place 
for  posting. 

Post  the  summary  of  the  cashbook  to  the  main  ledger. 

Close  the  sales  book  and  make  the  following  entry  for  the  total  foot- 
ing :  Accounts  Receivable  to  Merchandise.    Post  the  entry. 

Close  the  invoice  register.    Consult  the  model  on  pages  314  and  315. 

From  the  invoice  register  post  the  footing  of  the  Amount  column  to 
the  credit  of  Accounts  Payable  in  the  main  ledger,  and  debit  the  footing 
of  each  distributing  column  to  its  proper  account  in  the  general  ledger. 
This  completes  the  posting  to  the  general  ledger. 

As  the  sales  book  and  the  amount  column  of  the  invoice  register  have 
been  posted  to  the  sales  ledger  and  the  purchase  ledger  respectively,  and 
the  items  from  the  accounts  receivable  and  accounts  payable  columns 
of  the  mam  cashbook  have  been  posted  at  the  end  of  each  week,  all 
posting  is  now  completed. 

The  student  will  now  make  a  trial  balance  from  the  main  ledger. 
Have  it  approved  by  the  instructor.  Make  an  abstract  of  the  purchase 
ledger  and  prove  it  with  the  Accounts  Payable  in  the  general  ledger. 
Make  an  abstract  of  the  sales  ledger  and  prove  it  with  the  Accounts 
Receivable  in  the  general  ledger. 

Make  a  statement  of  losses  and  gains,  referring  to  the  model  given  on 
pages  328  and  329. 

After  giving  careful  attention  to  the  illustration  in  the  text,  make  the 
statement  of  losses  and  gains  from  the  trial  balance  made  from  your 
own  books.  Divide  the  Freight  and  Cartage  equally  between  material 
cost  (in-freight)  and  selling  expense. 

We  divide  Freight  and  Cartage  because  the  carting  of  material  from  the  freight 
station  to  the  factory  adds  to  the  cost  of  the  material  bought,  and  the  carting  to  the 
freight  station  of  the  manufactured  goods  sold  adds  to  the  expense  of  sales. 

Make  a  statement  of  resources  and  liabilities. 

The  above  statements  are  necessary  in  order  that  the  board  of  directors 
may  be  informed  regarding  the  condition  of  the  business  before  declaring 
a  dividend.  The  following  outline  will  suggest  the  form  of  resource  and 
liability  statement  to  be  used.  The  student  will  supply  amounts  from 
his  own  ledger. 


SET  VIIL    MANUFACTUKING- 


331 


Resources 

Cash,  per  cashbook 

Finished  Goods,  per  inventory 

Raw  Material,  per  inventory 

Incidentals,  per  inventory 

Accounts  Eeceivable,  due  the  business 

Machinery,  per  inventory 

Bills  Receivable,  on  hand   • 

Liabilities 
Capital  Stock,  par  value 
Accounts  Payable,  due  from  the  business 
Loss  and  Gain,  per  statement 


Closing  Accounts  eelating  to  Merchandise 

Raw  Material.  The  classification  of  accounts  with  raw  material  has 
been  explained  and  illustrated  in  connection  with  the  invoice  register  on 
page  315.  In  closing  the  ledger  these  accounts  are  transferred  to  the 
Merchandise  account.  If  all  raw  material  had  been  consumed,  there  would 
be  no  inventories  on  hand.  Therefore  all  inventories  in  these  accounts 
repr.esent  unconsumed  raw  material.  In  order  that  the  Merchandise 
account  may  show  just  what  it  has  cost,  in  raw  material,  to  manufacture 
goods,  these  accounts  are  closed  into  the  Merchandise  account. 

Labor.  The  labor  required  for  the  production  of  finished  goods  also 
represents  an  element  of  cost  in  merchandise.  Therefore  this  account 
is  closed  into  the  Merchandise  account. 

Merchandise 


Feb. 

3 

C.B. 

13 

687 

50 

Feb. 

16 

C.B. 

12 

34 

20 

28 

Whalebone 

10 

127 

20 

28 

S.  B. 

14 

1216 

40 

28 

Rawhide 

14 

62 

90 

28 

Inventory 

32 

347 

2S 

28 

Labor 

14 

285 

28 

Expense 

16 

172 

75 

28 

Loss  and  Gain 
Inventory 

28 

262 

50 

1597 

85 

1597 

85 

Mar. 

1 

347 

2  J 

Whalebone 


Feb. 

4 

28 

C.B. 
LB. 

Inventory 

13 
14 

100 
142 

50 
60 

Feb. 

28 
28 

Inventory 
Mdse. 

32 
4 

115 

127 
242 

30 

20 

242 

50 

Mar. 

1 

115 

30 

332 


BOOKKEEPING 


Rawhide 


Eeb. 

2 

28 

1 

C.  B. 
LB. 

Inventory 

13 
14 

110 
125 

40 

40 

Feb. 

28 
28 

Inventory 
Mdse. 

32 
4 

172 
62 

50 
90 

235 

235 

40 

Mar. 

172 

50 

Labor 


Feb. 

6 

28 

C.  B. 
C.  B. 

13 
14 

150 
135 

Feb. 

28 

Mdse. 

4 

285 

285 

285 

The  following  is  the  list  of  the  accounts  to  be  closed  into  the  Merchan- 
dise account,  according  to  the  model  given  herewith : 

Whalebone  Thread  Leather  and  Cloth 

Rawhide  Trimmings  Sundries 

Wood  Butts  Paints  and  Oils  Labor 

Reeds  Hardware  Mdse.  Discounts 

The  following  accounts  have  inventories : 


Whalebone 

1135.80 

Trimmings 

$64.20 

Rawhide 

148.75 

Paints  and  Oils 

66.70 

Wood  Butts 

28.60 

Hardware 

35. 

Reeds 

1020. 

Leather  and  Cloth 

56.45 

Thread 

110. 

Sundries 

18.50 

In  the  accounts  named  above  which  have  no  inventory  the  full  balance 
is  closed  into  the  Merchandise  account. 

Do  not  close  the  Merchandise  account  at  this  point. 

Incidentals.  A  third  element  in  the  manufacture  of  goods  is  incidental 
expenses.  As  a  matter  of  fact,  all  expenses  are  incurred  as  a  means  of 
carrying  on  the  manufacturing  interests,  and  all  money  paid  out  for 
incidental  expenses  simply  adds  to  the  cost  of  goods.  These  incidental 
items  are  of  importance  in  closing  the  books,  as  showing  what  relation 
they  bear  to  the  total  cost.  These  accounts  are  closed  into  the  Expense 
account  as  a  means  of  knowing  what  the  total  incidentals  represent,  and 
then  the  Expense  account  is  closed  into  the  Merchandise  account.  The 
inventories  represent  raw  material  on  hand  belonging  to  the  incidental 
accounts.    The  manner  of  closing  is  indicated  on  page  338, 


k 


SET  VIII.   MANUFACTUKING 


333 


Expense 

Feb. 

2 

C.B. 

13 

30 

Feb. 

28)  Mdse. 

^ 

172 

75 

5 

C.B. 

13 

15 

80 

/ 

20 

C.B. 

13 

1 

50 

/ 

28 

Print,  and  Ad. 

14 

16 

45 

/ 

28 

Salaries 

16 

95 

/ 

28 

Insurance 

19 

14 

- 

/ 

= 

172 

75 

^ 

172 

75 

Printing  and  Advertising 


Feb. 

20 

C.B. 
Inventory 

13 

36 

45 

Feh. 

28 
28 

Inventory 
Expense 

32 
16 

20 
16 

45 

36 

45 

36 

45 

Mar. 

1 

20 

Salaries 

Feb. 

20 
28 

C.B. 
C.B. 

13 
13 

10 

85 

Feh. 

28 

Expense 

16 

95 

95 

95 

Insurance 


Feb. 

6 

Inventory 

72 

50 

Feh. 

28 
28 

Inventory 
Expense 

32 
16 

58 

U 

72 

50 

72 

50 

50 

Mar. 

1 

58 

50 

The  following  is  the  list  of  the  accounts  to  be  closed  into  the  Expense 
account,  according  to  the  model  given  herewith : 

Printing  and  Advertising  Insurance 

Freight  and  Cartage  Fuel,  Light,  and  Rent 

Agents'  Salaries  Salaries 
Shipping 

The  following  accounts  have  inventories : 

Printing  and  Advertising      $10.25         Fuel,  Light,  and  Rent      $50. 

Shipping 


Insurance 


85. 


11.30 


In  those  accounts  above  which  have  no  inventory  the  full  balance  is 
closed  into  the  Expense  account. 


334  BOOKKEEPING 

After  the  above  accounts  have  been  closed  into  the  Expense  account 
slose  the  Expense  account  into  the  Merchandise  account. 

To  THE  Instructor.  If  you  deem  it  preferable,  the  Expense  account  may  be  closed 
directly  into  the  Loss  and  Gain  account.  If  this  is  done,  the  Merchandise  account  must 
also  be  closed  into  the  Loss  and  Gain  account,  without  reference  to  the  Expense  account. 

The  Merchandise  Inventory,  the  finished  goods  on  hand,  is  $1285.46. 

Closing  the  Merchandise  Account.  Enter  the  inventory  in  the  Mer- 
chandise account,  find  the  gain,  and  close  the  account  as  usual. 

The  Machinery  account  is  inventoried  at  cost. 
•     Closing  the  Loss  and  Gain  Account.    In  this  set  the  closing  of  the  Loss 
and  Gain  account  is  effected  by  a  journal  entry,  as  follows : 

Loss  and  Gain  i|323.50 

To  Dividend  account  |300. 

To  Undivided  Profits  23.50 

Dividends  are  usually  declared  quarterly,  semiannually,  or  annually. 
In  this  set,  in  order  that  the  student  may  have  the  work  of  closing  the 
Loss  and  Gain  account,  a  monthly  dividend  will  be  declared. 

At  a  meeting  of  the  board  of  directors,  a  statement  of  the  business 
having  been  presented,  a  dividend  of  2%  on  the  capital  stock  was  de- 
clared. Compute  the  dividend  and  then  make  a  journal  entry  similar  to 
the  one  given.  The  net  gain  will  be  verified  by  the  instructor.  Open 
accounts  with  Dividends  and  Undivided  Profits.  Post  the  journal  entry 
and  close  the  Loss  and  Gain  account.  When  the  dividends  are  paid  in 
cash  to  the  stockholders,  the  Dividend  account  will  then  be  closed. 

After  closing  the  books,  take  a  trial  balance  of  the  ledger. 

An  Analysis  of  the  Merchandise  Account.  The  student  will  now  turn 
to  his  ledger  and  follow  carefully  the  statements  given  below : 


Total  sales 

$6801.50 

Cost  of  manufacturing 

16070.23 

Eaw  material 

13131.75 

Labor 

1732. 

Incidentals 

1166.10 

Mdse.  Disc. 

40.38 

Goods  on  hand  Feb.  1 

1500. 
17570.23 

Less  inventory  Feb.  27 

1285.46 

Cost  of  goods  sold 

6284.77 

Gain 

$516.73 

The  above  analysis  shows  that  the  raw  material  cost,  in  even  numbers, 
52%  ;  labor,  28%  ;  incidentals,  20%. 


APPENDIX  A 

SINGLE  ENTRY 

Object.  This  set  is  designed  to  illustrate  in  a  simple  and  practical  way  the 
uses  of  that  method  of  bookkeeping  known  as  single  entry.  As  the  student 
is  already  familiar  with  double  entry,  a  comparison. of  the  two  methods  will 
help  him  to  understand  single-entry  bookkeeping. 

Single  Entry  and  Double  Entry  may  be  compared  as  follows  : 

The  books  used  are  very  nearly  the  same  for  either  method.  The  sales 
book,  the  purchase  book,  the  journal,  the  cashbook,  the  bill  book,  and  the  ledger 
are  the  same  in  form.    The  general  principles  employed  are  identical. 

The  statement  of  resources  and  liabilities  is  the  same. 

The  present  worth  and  the  net  gain  or  the  net  loss  of  a  business  are 
shown  by  either  method. 

Single  Entry  and  Double  Entry  may  be  contrasted  as  follows  : 

In  double  entry,  the  journal  has  both  a  debit  and  a  credit  record  for  each 
transaction ;  in  single  eiitry,  the  journal  has  only  a  debit  or  a  credit  record 
for  each  transaction.    (See  model  journal,  page  ii.) 

In  double  entry  all  items  in  the  cashbook  are  posted ;  in  single  entry  only 
items  that  affect  personal  accounts  are  posted.  In  this  set  these  items  are 
recorded  in  the  first  column  of  the  cashbook.  (See  model  cashbook,  pages  ii 
and  iii.) 

In  a  single-entry  ledger  only  personal  accounts  are  kept. 

An  itemized  statement  of  losses  and  gains  cannot  be  made  from  a  single- 
entry  ledger,  as  loss  and  gain  accounts  are  not  kept  in  the  ledger. 

In  double  entry  the  separate  sources  of  loss  and  gain  are  clearly  set  forth, 
while  single  entry  shows  only  total  results  and  furnishes  no  detailed  informa- 
tion regarding  the  channels  through  which  these  results  were  obtained. 

A  double-entry  ledger  is  in  balance ;  a  trial  balance  cannot  be  taken  from 
a  single-entry  ledger,  because  property  and  other  accounts  not  personal  are 
not  in  this  ledger. 

Single  Entry  may  be  used  to  advantage  in  any  small  business,  or  where  the 
business  deals  in  few  articles  of  purchase  and  sale,  or  where  a  classification 
of  accounts  relating  to  losses  and  gains  is  not  wanted. 

If  books  are  strictly  single  entry,  only  accounts  with  persons  are  kept  in 
the  ledger;  if  any  other  accounts  appear  in  the  ledger,  the  method  is  not 
strictly  single  entry. 

As  the  student  is  familiar  with  the  various  books  of  record,  few  explana- 
tions are  given  in  this  set. 

i 


u 


BOOKKEEPING 


Cash  Receipts 


Jan.    1 

V 

D.  H.  Boone 

Investment 

2500 

3 

V 

Mdse. 

Cash  sale 

64 

4 

2 

A.  D.  Brown 

On  account 

132 

64 

10 

V 

Bills  Rec. 

S.  Coe's  note 

275 

10 

v 

Interest 

On  above 

6 

40 

20 

4 

C.  C.  Willis 

On  account 

38 

50 

20 

Discount 
Personal  accts. 

On  our  note 
Total 

2 
171 

35 

31 

171 

14 

14 

3018 

89 

Model  Journal 

January  1,  19 — 


I,  D.   H.  Boone,  commenced  business   with  the 
following  resources : 


I).  H.  Boone 
Cash 

Ileal  Estate 
Bills  Kec. 


Cr. 


On  hand 
Store  and  lot 
Per  bill  book 


A.  S.  Barnes  Cr. 

Received  his  note  at  30  da.,  to  apply  on  account 

7 


Benjamin  Harmon  Dr. 

Gave  my  note  at  60  da.,  with  interest,  in  full  of 
account 


2500 

2000 

300 


4800 


250 


300 


Model 
Bills 


NO. 


DATE 


DRAWER  OR  INDORSER 


DRAWEE  OR  MAKER 


IN  WHOSE  FAVOR 


FOR  WHAT  RECEIVED 


ocyoyi/^^GaJyci^n 


Bills 

NO. 

DATE 

DRAWER  OR  INDORSER 

DRAWEE  OR  MAKER 

IN  WHOSE  FAVOR 

FOR  WHAT  GIVEN 

/ 
2- 

iu 

■/2. 

V 

APPENDIX  A 


m 


Cash  Payments 


Jan.    2 

n/ 

5 

V 

6 

7 

9 

V 

20 

V 

24 

5 

31 

V 

31 

Expense 
Bills  Pay. 
Amos  Lees 
Expense 
Bills  Pay. 
D.  J.  Bailey 
Personal  accts. 
Balance 


Rent  of  store 
Note,  favor  N.  Cass 
On  account 
Office  stationery 
Note,  favor  J.  Reed 
In  full  of  account 
Total 
On  hand 


287 


175 


462 


50 


50 


100 

360 

12 

50 

260 

462 

50 

1823 

89 

3018 

89 

Cashbook.  In  the  explanatory  part  of  the  text,  at  the  beginning  of  this  set, 
it  was  noted  that  the  cashbook  is  very  nearly  the  same  in  single  entry  as  in 
double  entry.  The  above  form  is  easily  understood.  All  items  that  are  to  be 
posted  are  placed  in  the  first  money  column. 

Journal.  The  form  on  page  ii  is  a  single-entry  journal.  As  the  student 
is  now  familiar  with  the  principles  of  debit  and  credit,  this  form  will  be 
readily  understood.  Just  at  the  left  of  the  first  money  column  it  is  neces- 
sary to  write  either  Dr.  or  Cr.  as  a  means  of  determining  how  the  item  is  to 
be  posted.  As  only  personal  items  are  posted  in  single  entry,  only  the  names 
of  persons  appear  in  the  journal. 

Bill  Book.  This  book  is  used  for  recording  all  notes  received  or  issued  by 
the  business.  It  is  generally  divided  into  two  parts,  one  for  bills  receivable 
and  the  other  for  bills  payable.  A  full  description  of  all  notes  received  or 
issued  should  be  recorded  in  the  bill  book.  All  canceled  notes  should  be 
marked  paid  in  this  book. 

The  notes  recorded  in  the  model  bill  book  are  from  the  single-entry  set. 


Bill  Book 
Receivable 


WHERE  PAYABLE 


TIME 


WHEN  DUE 


AMOUNT 


WHEN  AND  HOW  DISPOSED  OF 


xj- 


3  o  o 


2^ 


Payable 

WHERE  PAYABLE 

TIME 

WHEN  DUE 

AMOUNT 

YEAR 

MONTH 

DAY 

WHEN  AND  HOW  DISPOSED  OF 

^ 
.^^ 

/ 

— 

(^^^ 

XZ- 

~^^^U^ 

iv  BOOKKEEPING 

Memoranda  of  Transactions 
Directions  and  Suggestions.  Observe  the  following  directions  and  suggestions : 

1.  David  Easton  is  the  proprietor.    Student  acts  as  bookkeeper  and  manager. 

2.  No  business  forms  are  used. 

3.  No  days  of  grace  are  allowed  on  any  notes. 

4.  The  business  is  general  merchandise. 

Jan.  1.   The  following  were  the  resources  at  the  beginning  of  the  business  : 

Cash  on  hand,  $2000 

Store  and  lot,  valued  at  $4000 

(ieo.  Wilson's  note,  dated  Dec.  10,  at  60  da.,  $500 

Enter  the  preceding  items  in  the  journal.    Kefer  to  the  model  journal,  page  ii. 
Enter  the  cash  in  the  cashbook,  second  column.    Record  the  note  in  the  bill  book. 
Refer  to  the  model  bill  book,  pages  ii  and  iii. 

2.  Bought  of  W.  R.  Story  for  cash : 

40  bbl.  Pork  at  $14 
Enter  Mdse.  in  the  cashbook,  second  column. 

2.  Paid  A.  R.  Deneen  cash,  for  sundry  repairs,  $50. 

3.  Bought  of  James  Selden  on  account : 

50  bbl.  Beef  at  $17  60  bbl.  Salt  at  $1.50 

Enter  in  the  purchase  book. 

4.  Sold  Edward  White  for  cash : 

20  bbl.  Pork  at  $16 
Enter  Mdse.  in  the  cashbook,  second  column. 

5.  Sold  John  Harrison  on  account : 

20  bbl.  Beef  at  $18.50  10  bbl.  Salt  at  $1.60 

Enter  in  the  sales  book. 

5.  Paid  J.  D.  Russell  cash,  for  ofi&ce  stationery,  $12.25. 

6.  Paid  James  Selden  cash  for  one  half  the  invoice  of  Jan.  3. 

Enter  in  the  cashbook,  first  column. 

7.  Sold  Jesse  Blaine  on  account : 

10  bbl.  Pork  at  $16.50  10  bbl.  Beef  at  $19 

10  bbl.  Salt  at  $1.62 

8.  Bought  of  William  Edison  on  account : 

25  bbl.  Pork  at  $13.50  30  bbl.  Beef  at  $16.50 


APPENDIX  A  V 

Jan.  9.  Discounted  Geo.  Wilson's  note,  and  received  cash  for  the  proceeds. 

The  term  of  discount  is  the  time  from  the  date  of  discount  to  the  maturity  of  the  note. 
Enter  the  face  of  the  note  on  one  side  of  the  cashbook  and  the  discount,  under  Interest^ 
on  the  other  side,  each  item  in  the  second  column. 

10.  Sold  E.  C.  Bartlett  on  account : 

G  bbl.  Pork  at  $15         ,  10  bbl.  Beef  at  $18.25 

11.  Sold  Howard  Stetson  on  account : 

12  bbl.  Beef  at  $18.75  15  bbl.  Salt  at  $1.65 

12.  Gave  James  Selden  a  note  at  10  da.,  with  interest,  for  the  balance  of 
the  invoice  of  Jan.  3. 

Enter  the  note  in  the  journal  and  record  it  in  the  bill  book. 

12.  Paid  Page  &  Co.  cash,  for  an  office  safe,  $85. 

13.  Sold  Henry  White,  one  half  cash,  balance  on  account : 

12  bbl.  Pork  at  $16.25  20  bbl.  Salt  at  $1.70 

Enter  the  whole  amount  in  the  sales  book,  and  then  enter  the  cash  received  in  the  cash- 
book,  first  column. 

14.  Bought  of  Samuel  Jones,  one  half  cash,"'balance  on  account : 

50  bbl.  Beef  at  $16.50  100  bbl.  Salt  at  $1.48 

Enter  the  whole  amount  in  the  purchase  book,  and  then  enter  the  cash  paid  in  the  cash- 
book,  first  column. 

15.  Bought  of  H.  C.  Benton  on  account : 

60  bbl.  Pork  at  $14.75 

15.  Received  John  Harrison's  note  at  10  da.,  with  interest,  for  $300,  to 
apply  on  the  invoice  of  Jan.  5. 

Record  in  the  bill  book. 

16.  Received  of  Jesse  Blaine  cash,  to  apply  on  the  invoice  of  Jan.  7,  $250. 

17.  Sold  P.  H.  Williams  on  account : 

25  bbl.  Pork  at  $16.75 

17.  Gave  W^illiam  Edison  a  note  at  15  da.,  with  interest,  for  $500,  and 
cash  for  the  balance  of  the  invoice  of  Jan.  8. 

Enter  the  note  in  the  journal  and  record  it  in  the  bill  book.  Enter  the  cash  in  the  cash- 
book,  first  column. 

18.  Sold  W.  B.  Emerson  on  account : 

25  bbl.  Beef  at  $18.75  20  bbl.  Salt  at  $1.70 

18.  Bought  of  Williamson  &  Son  on  account : 

40  bbl.  Flour  at  $5.25 


vi  BOOKKEEPING 

Jan.  19.  Received  of  Jesse  Blaine  cash,  for  balance  of  the  invoice  of  Jan.  7. 

19.  Received  of  E.  ^.  Bartlett  his  note  at  15  da.  for  $200,  and  cash  for  the 
balance  of  the  invoice  of  Jan.  10. 

20.  Sold  D.  V.  Negley  on  account : 

15  bbl.  Flour  at  $6.50 

20.  Received  of  Howard  Stetson  cash,  for  the  invoice  of  Jan.  11. 

21.  Sold  Thomas  Fleming  on  account : 

12  bbl.  Pork  at  $16.90  15  bbl.  Beef  at  $19 

21.  Sold  Warren  Phelps,  one  half  cash,  balance  on  account : 

20  bbl.  Pork  at  $16.80  18  bbl.  Beef  at  $18.80 

30  bbl.  Salt  at  $1.65 

22.  Paid  James  Selden  cash,  for  note  and  interest  due  to-day. 

Enter  both  the  note  and  the  interest  in  the  cashbook,  second  column,  and  mark  the 
note  paid  in  the  bill  book. 

2S.  Sold  Jesse  Blaine  on  account : 

12  bbl.  Beef  at  $18.75  15  bbl.  Flour  at  $6.50 

2S.   Gave  the  proprietor  a  check  for  private  use,  $150. 
Enter  in  the  cashbook,  first  column. 

24.  Bought  of  William  Edison  on  account : 

35  bbl.  Pork  at  $14.25 

24.  Gave  H.  C.  Benton  cash,  on  account,  $625. 

24.  Received  of  P.  H.  Williams  cash,  on  account,  $325. 

25.  Bought  of  James  Selden  on  account : 

40  bbl.  Beef  at  $16.75 

25.  Received  of  D.  V.  Negley  cash,  for  the  invoice  sold  him  on  Jan.  20. 
25.  Paid  Williamson  &  Son  cash,  for  the  invoice  of  Jan.  18. 

25.  Received  of  John  Harrison  cash,  for  his  note  and  interest  due  to-day. 

26.  Received  of  Warren  Phelps  his  note  at  10  da.,  with  interest  for  the 
balance  of  the  invoice  of  Jan.  21. 

26.  Sold  John  Harrison  on  account : 

12  bbl.  Pork  at  $16 

26.  Sold  E.  C.  Bartlett  on  account : 

20  bbl.  Beef  at  $18 

27.  Bought  of  Williamson  &  Son  on  account : 

•25  bbl.  Flour  at  $5.40 


I 


APPENDIX  A  VU 

Jan.  27.  Sold  Howard  Stetson  on  account ; 

10  bbl.  Flour  at  $6.50  10  bbl.  Salt  at  $1.68 

27.  Received  of  W.  B.  Emerson  cash,  on  the  invoice  of  Jan.  18,  |400. 

28.  Received  of  Thomas  Fleming  cash,  on  account,  |250. 

28.  Sold  D.  V.  Negley  on  account : 

10  bbl.  Pork  at  $16.20 

29.  Sold  Warren  Phelps  on  account : 

12  bbl.  Beef  at  $18.25 

30.  Paid  Bell  Printing  Co.  cash,  for  advertising,  $19.65. 

31.  Paid  Albert  Force,  a  clerk,  cash,  for  one  month's  salary,  $32.50. 

Inventories,  January  31,  19 — 

Merchandise : 

33  bbl.  Pork  $14. 

16  bbl.  Beef  16.75 

45  bbl.  Salt  1.50 

25  bbl.  Flour  5.20 

Expense : 

Office  Safe  at  cost  $85. 

Real  Estate : 

Store  and  Lot  $4000. 

Closing  the  Work  for  Single  Entry 

After  recording  all  transactions,  have  them  corrected  by  the  instructor. 
Close  the  cashbook.    (See  model,  pages  ii  and  iii.) 
Posting.    In  posting,  observe  the  following : 

1.  Place  three  accounts  on  each  page  of  the  ledger. 

2.  The  Proprietor's  account  should  be  placed  first. 

3.  Open  an  account  with  each  person  whose  name  appears  in  the  sales  book 
or  the  purchase  book. 

4.  Debit  each  person  whose  name  appears  in  the  sales  book. 

5.  Credit  each  person  whose  name  appears  in  the  purchase  book. 

6.  Post  from  the  journal.  The  debit  or  the  credit  of  each  item  in  the 
journal  is  indicated. 

7.  Post  from  the  cashbook.  Each  item  in  the  first  column  on  the  left  side 
of  the  cashbook  should  be  posted  as  a  credit ;  each  item  in  the  first  column 
of  the  cashbook  on  the  right  side  should  be  posted  as  a  debit. 

8.  The  above  completes  the  posting. 

Note.  Posting  directly  from  the  sales  book,  the  cashbook,  and  the  purchase  book  is  a 
modification  of  the  older  methods  of  single  entry,  but  the  plan  here  suggested  saves  much 
time  both  in  recording  and  in  posting  transactions. 


I 


viii  BOOKKEEPING 

The  Statement.    Make  a  statement  as  follows  : 

1.  The  total  of  the  balances  of  all  the  accounts  in  the  ledger  in  which  the 
debit  is  the  larger  represents  accounts  receivable. 

2.  The  total  of  the  balances  of  all  the  accounts,  the  Proprietor's  account 
excepted,  in  which  the  credit  is  the  larger  represents  accounts  payable. 

3.  The  unpaid  notes  in  the  bill  book  are  to  be  used  in  making  the  statement. 

Before  making  the  statement  of  resources  and  liabilities,  it  is  suggested  that  the 
student  examine  the  records  in  the  bill  book  to  find  out  if  each  note  issued  or  re- 
ceived has  been  recorded,  and  if  all  notes  either  paid  or  discounted  have  been  so 
marked  in  the  bill  book. 

It  is  easier  to  avoid  errors  than  to  correct  them. 

Resources : 

Accounts  Receivable,  per  ledger 
Real  Estate,  per  inventory 
Expense,  per  inventory 
Merchandise,  per  inventory 
Bills  Receivable,  per  bill  book 
Cash,  per  cashbook 

Liabilities : 

Accounts  Payable,  per  ledger 
Bills  Payable,  per  bill  book 
The  present  worth  equals  the  difference  between  the  resources  and  the 
liabilities. 

The  present  worth  minus  the  net  credit  equals  the  net  gain. 
Enter  the  net  gain  in  the  journal  as  follows : 

David  Easton  ♦      ,      Cr 

Net  gain,  per  statement 

Post  the  net  gain  to  the  Proprietor's  account  and  show  the  present  worth 
as  in  double  entry. 

Changing  to  Double  Entry.    Change  to  double  entry  as  follows : 

1.  Debit  each  of  the  following  accounts  in  the  ledger  with  the  amount 
appearing  in  the  statement: 

Real  Estate  Expense 

Merchandise  Bills  Receivable 

2.  Credit  Bills  Payable  with  the  amount  appearing  in  the  statement. 

3.  Take  a  trial  balance  from  your  ledger ;  use  the  cash  balance  from  the 
cashbook. 

Note.  Some  bookkeepers  prefer  to  journalize  the  items  which  enter  into  the  change  of 
single  entry  to  double  entry.  Various  entries  may  be  made  to  bring  about  the  desired 
effect,  but  a  record  similar  to  the  following  is  generally  preferred,  since  by  it  all  the 
resources  and  all  the  liabilities  of  the  business  are  shown  in  a  form  convenient  for  transfer- 
ring to  the  ledger. 


APPENDIX  A 


IX 


January  31,  19 — 


5 
3 
2 
3 
C.B. 
3 
V 


Accounts  Receivable 

Real  Estate 

Expense 

Mdse. 

Bills  Receivable     - 

Cash 
Bills  Payable 
Accounts  Payable 
C.  D.  Lewis,  Prop. 


Per  ledger 

2310 

Per  inventory 

4000 

Per  inventory 

50 

Per  inventory 

920 

Per  bill  book 

428 

Per  cashbook 

1650 

Per  bill  book 

365 

Per  ledger 

2560 

Per  ledger 

6433 

The  items  that  are  already  in  the  ledger  are  marked  sj  so  that  they  will  not  be  posted. 
After  the  above  entry  has  been  posted,  the  accounts  of  the  business  are  in  double-entry 
form. 

A  Double-Entry  set  of  books  may  be  changed  to  a  single-entry  set  by  leav- 
ing out  of  the  ledger  all  accounts  except  personal  accounts. 

The  Use  of  Other  Sets  for  Single  Entry.  If  the  instructor  thinks  it  desirable 
to  have  additional  work  in  single  entry,  it  is  suggested  that  any  set  in  the 
Introductory  portion  of  the  textbook  may  be  written  in  single-entry  form. 
Journal  paper  and  ledger  paper  may  be  used  for  this  additional  work. 

REVIEW  EXERCISES 

The  following  review  exercises  are  suggested : 

1.  July  1  Frank  Wilson  and  Chas.  K.  Peck  began  a  Provision  business  with 
the  following  resources  and  liabilities  : 


Resources 

Cash 

$1350 

Merchandise 

4250 

Office  Fixtures 

240 

Horse  and  Wagon 

200 

Accounts  Receivable 

850 

Liabilities 

Bills  Payable 

$800 

Accounts  Payable 

940 

The  partners  had  an  equal  interest  in  the  business. 
The  books  had  been  kept  by  single  entry. 

October  1  the  partners  decided  to  change  the  books  to  double  entry.    The 
resources  and  the  liabilities  on  that  date  were  as  follows : 


Resources 

Cash 

$925 

Merchandise 

4150 

Office  Fixtures 

240 

Horse  and  Wagon 

200 

BOOKKEEPING 

Resources  (continued) 
Accounts  Receivable : 


A.  H.  Kern 

$150 

Thos.  L.  Fuller 

135 

E.  R.  Lakey 

165 

H.  M.  Hanna 

175 

Henry  S.  Arnold 

250 

Henry  I.  Brook 

110 

Liabilities 

Bills  Payable 

#325 

Accounts  Payable: 

H.  J.  Gould 

100 

Jas.  L.  Burgess 

140 

A.  H.  Francis 

200 

Geo.  F.  Hatfield 

85 

a.  On  a  ledger  sheet  credit  each  partner  with  one  half  of  the  net  resources 
on  July  1. 

b.  Make  a  statement  showing  the  net  gain  on  October  1. 

c.  Credit  each  partner  in  the  ledger  with  one  half  of  the  net  gain,  and 
show  the  present  worth  of  each  partner. 

d.  Change  the  books  to  double  entry  by  debiting  in  the  ledger  each  re- 
source item,  and  crediting  each  liability  item,  on  October  1. 

e.  Take  a  trial  balance  of  the  ledger. 

Note.    If  the  instructor  so  desires,  the  change  to  double  entry  may  be  accomplished 
by  making  the  journal  entry  as  illustrated  on  page  ix. 

2.  The  following  is  a  trial  balance  from  a  double-entry  ledger.    From  this 
trial  balance  open  a  single-entry  ledger,  four  accounts  to  the  page. 


James  L.  Gary,  prop. 

$3500 

Harvey  A.  Phelps,  prop. 

3500 

Cash 

$1645 

Merchandise 

3256 

Real  Estate 

1625 

Expense 

87 

Office  Fixtures 

310 

Horse  and  Wagon 

250 

Bills  Receivable 

195 

A.  T.  F.  Ry.  Stock 

1000 

Accounts  Receivable : 

505 

S.  M.  Aker 

$150 

D.  A.  White 

85 

Roy  &  Co. 

45 

Edward  Wise 

130 

John  Gross 

95 

Bills  Payable 

933 

Accounts  Payable : 

940 

James  Hyde 

230 

H.  C.  Alden 

50 

A.  R.  Waite 

115 

E.  S.  Dent 

175 

A.  S.  Flint 

120 

David  R.  Race 

250 

$8873 

$8873 

APPENDIX  B 

DEFINITIONS  AND  EXPLANATIONS 

Bookkeeping  is  the  art  of  making  a  systematic  record  of  business  transac- 
tions, enabling  the  proprietor  to  ascertain  the  condition  of  his  business. 

A  Business  Transaction  is  an  exchange  of  values. 

There  are  two  methods  of  bookkeeping,  Double  Entry  and  Single  Entry. 

In  Double  Entry,  accounts  are  kept  not  only  with  persons  but  with  all 
sources  that  affect  the  results  or  the  condition  of  the  business. 

In  Single  Entry,  accounts  are  kept,  usually,  with  persons  only. 

There  are  two  classes  of  accounts  : 
Resource  and  liability  accounts ; 
Loss  and  gain  accounts. 

An  Inventory  is  an  itemized  statement  or  schedule,  in  writing,  showing  the 
amount  of  certain  assets  owned  by  the  business,  or  certain  liabilities  owed 
by  the  business. 

Allowances  are  made  for  the  use  of  money,  for  the  early  payment  of  in- 
voices, etc.    Interest  and  discount  are  allowances. 

Capital,  at  the  beginning  of  business,  usually  is  the  amount  invested;  at 
other  times  it  is  the  excess  of  resources  over  liabilities. 

Merchandise  includes  all  commodities  which  are  held  for  purposes  of 
exchange. 

Expense  is  any  expenditure  to  carry  on  the  business. 

Interest  is  the  compensation  allowed  by  law  or  fixed  by  the  parties  for  the 
use  or  forbearance  or  detention  of  money.  —  Huffcut. 

Discount  is  usually  an  allowance  for  early  payment. 

Bills  Receivable  are  the  written  promises  of  others  to  pay  us. 

Bills  Payable  are  our  written  promises  to  pay  others. 

Posting  is  a  process  of  transferring  debit  and  credit  items  to  their  respective 
accounts  in  the  ledger. 

Present  Worth  of  the  Proprietor's  account : 
Is  net  credit  plus  net  gain ;  or 
Net  credit  minus  net  loss  ;  or 
The  excess  of  resources  over  liabilities.. 

A  Receipt  is  a  written  acknowledgment  of  money  or  other  value  received. 

A  Voucher  is  a  written  statement  proving  that  some  transaction  has 
occurred. 

When  resources  exceed  liabilities  a  business  is  Solvent. 

When  liabilities  exceed  resources  a  business  is  Insolvent. 

xi 


xii  BOOKKEEPING 

A  Statement  of  the  business  shows  the  results  and  the  present  condition  of 
the  business ;  a  Statement  of  a  ledger  account  is  an  abstract  of  the  account, 
and  shows  the  balance  remaining  unpaid. 

The  Journal  is  a  book  in  which  the  debits  and  the  credits  of  business 
transactions  are  arranged  systematically  ;  the  history  of  each  transaction  and 
the  amount  are  included. 

The  Ledger  is  a  book  containing  the  accounts  of  the  business,  the  debits  and 
the  credits  having  been  collected  from  other  books  of  entry. 

A  Book  of  Original  Entry  is  a  book  in  which  entries  are  made  first. 

An  Auxiliary  Book  is  subordinate  to  a  book  of  original  entry. 

A  Bill  Book  contains  an  itemized  record  of  all  notes  received  or  issued  by 
the  business. 

The  term  Charge,  as  used  in  bookkeeping,  means  debit. 

Red  Ink  is  used  for 
All  rulings ; 

Recording  inventories  in  ledger  accounts , 
Entering  item§  in  the  ledger  that  are  to  be  transferred. 

In  closing  accounts,  a  single  red  line  means  that  the  items  above  it  are  to 
be  added;  double  red  lines  mean  that  the  account  is  closed,  the  items  and 
the  totals  above  this  ruling  are  not  to  be  used  again. 

An  Invoice  is  an  itemized  statement  of  goods  bought  or  sold.  It  includes 
the  names,  the  quantities,  the  prices,  and  the  amounts. 


RULES  FOR  JOURNALIZING 

General  Rule : 

Debit  the  account  that  stands  for  a  value  received,  or  for  a  person  or  a 

thing  that  causes  value  to  go  out. 
Credit  the  account  that  stands  for  a  value  given,  or  for  a  person  or  a 

thing  that  brings  in  value. 

Rule  I.    Proprietor's  Account.    The  proprietor  is  debited : 
For  withdrawals  from  the  business  for  personal  use ; 
For  his  liabilities  assumed  by  the  business ; 
For  net  loss  when  the  books  are  closed. 

The  proprietor  is  credited : 

For  all  investments  in  the  business  ; 

For  net  gain  when  the  books  are  closed,     i. 

Rule  II.    Property  Accounts.    Under  its  given  name  property  is 
Debited  when  it  comes  into  possession  of  the  business ; 
Credited  when  the  business  parts  with  it. 

Property  includes  cash,  merchandise,  real  estate,  notes,  etc. 

That  the  journalizing  of  bills  receivable  and  bills  payable  may  be  more  clearly  under- 
stood, separate  rules  are  given  herewith. 


APPENDIX  B  xm 

Rule  III.   Bills  Receivable.    Under  this  title  they  are 

Debited  when  received  by  the  business ; 

Credited  when  the  business  parts  with  them. 
Rule  IV.    Bills  Payable.    Under  this  title  they  are 

Debited  when  redeemed  by  the  business ; 

Credited  when  issued  by  the  business. 
Rule  V.    Accounts  with  Persons.    Persons  are  debited : 

When  they  get  into  our  debt ; 

When  we  get  out  of  their  debt. 
Persons  are  credited : 

When  we  get  into  their  debt ; 

When  they  get  out  of  our  debt. 

Personal  accounts  are  open  accounts  with  individuals,  firms,  or  corporations.  Generally 
they  are  the  result  of  buying  or  selling  on  account. 

Rule  VI.    Expense  Account.    This  account  is 

Debited  for  any  expenditure  to  carry  on  the  business ; 
Credited  for  the  proceeds  of  the  sale  of  any  item  previously  charged  to 
expense. 

Expense  includes  rent,  salaries,  insurance,  and  other  like  items.    In  a  large  business  a 
separate  account  is  kept  with  each  of  these  items. 

Rule  VII.    Allowances.    Under  the  given  names  these  items  are 
Debited  when  we  allow  them  to  others ; 
Credited  when  allowed  by  them  to  us. 


APPENDIX  C 

LOOSE-LEAF  METHODS  AND  FILING  DEVICES 

Modern  business  men  have  adopted  many  inventions  for  saving  time, 
reducing  labor,  and  lessening  expense.  Many  of  these  have  been  applied  to 
bookkeeping  and  to  general  office  work. 

At  the  very  outset  it  ought  to  be  noted  that  these  devices  have  nothing  whatever  to 
do  with  the  principles  that  govern  bookkeeping  ;  debit  and  credit  are  unchanging  factors, 
no  matter  what  form  of  record  may  be  made. 

Different  kinds  of  business  and  different  methods  in  the  same  business 
make  various  plans  desirable  and  even  necessary.  This  fact  is  responsible 
for  the  production  of  a  multitude  of  devices  for  carrying  on  office  work  and 
Keeping  accounts. 

So  many  systems  are  in  use  that  only  a  brief  reference  can  be  made  to  them  here.  The 
character  of  the  business  and  the  manner  of  conducting  it  determine  what  devices  may 
be  used  advantageously.  The  value  of  any  of  them  depends  on  the  volume  of  business 
transacted  and  the  records  required  for  giving  necessary  information  concretely  and  in 
accessible  form. 

Loose-Leaf  Methods.  Books  equipped  with  locking  devices  so  arranged  that 
leaves  may  be  inserted  or  removed  at  will  are  used  generally  and  have  many 
advantages.  The  suggestions  here  given  apply  particularly  to  a  loose-leaf 
ledger,  but  they  have  a  bearing  on  any  one  of  the  many  books  where  loose 
leaves  are  used. 

As  insertions  or  removals  in  any  book  may  be  made  to  conform  to  require- 
ments, smaller  pages  may  be  used  than  in  a  bound  book. 

Pages  containing  accounts  that  are  closed  may  be  removed  and  filed  in 
transfer  covers  or  binders  for  subsequent  reference,  if  such  reference  be- 
comes necessary.  This  keeps  the  ledger  volume  for  current  use  free  from 
dead  accounts.  It  also  obviates  the  necessity  of  opening  new  books,  as  only 
live  accounts  remain  permanently  in  the  ledger. 

By  the  use  of  projecting  leather  tabs,  index  leaves  may  be  inserted,  so  the 
book  is  practically  self-indexing,  as  the  removal  of  a  leaf  or  the  insertion  of 
a  new  one  does  not  affect  the  index  division. 

The  ability  to  remove  leaves  from  a  book  of  account  at  will  is  open  to  the  objection  that 
it  may  suggest  to  an  unreliable  person  the  possibility  of  tampering  with  important  records, 
as  one  leaf  can  be  easily  withdrawn  and  another  substituted.  For  this  reason  some  have 
maintained  that  this  form  of  record  should  not  be  used  in  certain  books,'  such  as  the 
general  ledger. 


APPENDIX  C  XV 

Card  Systems.  All  are  familiar  with  the  card  index  found  in  a  public  library. 
This  is  illustrative  of  many  card-index  systems  now  in  use  in  modern  busi- 
ness offices.    The  following  may  be  named  as  a  special  advantage : 

The  readiness  with  which  unused  accounting  or  statistical  material  may 
be  eliminated,  and,  correspondingly,  new  material  may  be  inserted. 

The  CARD  LEDGER  is  a  series  of  cards  ruled  in  regular  ledger  form,  filed  in 
a  box  or  a  cabinet,  and  properly  indexed  with  projecting  guide  cards.  It  is  a 
substitute  for  a  regular  ledger.    The  following  are  its  advantages : 

All  closed  accounts  are  readily  eliminated  and  new  accounts  are  as  readily 
inserted. 

Monthly  statements  of  customers'  accounts  may  be  made  by  several  persons 
working  on  the  ledger  at  the  same  time ;  in  a  bound  ledger  only  one  person 
can  thus  work. 

Any  account  required  for  reference  may  be  taken  from  the  file,  and  the 
regular  work  of  the  bookkeeper  on  the  ledger  will  not  be  interrupted. 

The  use  of  projecting  tabs  affords  an  easy  method  of  indexing. 

Duplicate  Billing.  By  using  carbon  paper  a  duplicate  or  several  duplicates 
of  any  writing  may  be  made,  either  with  the  pen,  or  with  a  typewriter,  or 
with  a  billing  machine.  For  instance,  instead  of  entering  all  sales  in  a  sales 
book,  a  duplicate  may  be  made,  which  insures  a  copy  identical  with  the  bill 
sent  to  the  customer;  the  postings  may  be  done  from  the  carbon  records, 
which,  when  bound,  constitute  the  sales  book.  The  saving  of  time  and  the 
avoidance  of  errors  are  real  advantages. 

Carbon  duplication  may  be  used  in  a  multitude  of  ways,  and  may  be  applied  to  many 
forms  of  record. 

Billing  machines,  and  typewriters  with  billing  attachments,  afford  ideal  facilities  for 
both  original  and  duplicate  work. 

Filing  Devices.  The  vast  accumulation  of  letters,  documents,  pamphlets, 
and  the  like,  in  a  large  business  office,  makes  some  system  absolutely  neces- 
sary, if  material  is  to  be  readily  available  for  use  when  needed.  This  is  pro- 
vided for  by  modern  filing  systems,  usually  vertical  for  accessibility,  which 
meet  the  two  essential  requirements  of  a  modern  business  office,  namely, 
classification  of  material  and  ready  reference.  So  successfully  are  these 
requirements  met  by  manufacturers  that  the  production  of  filing  systems 
has  become  a  large  industry.  The  following  are  special  features :  systems 
of  indexing  in  any  form  that  may  be  required,  alphabetical,  numerical,  by 
subject,  or  otherwise ;  provisions  for  classification  and  for  elimination. 

The  most  common  form  of  filing  devices  is  a  cabinet  of  drawers  so  arranged  that  the 
papers  or  documents  may  be  filed  in  either  a  flat  or  a  vertical  position,  and  may  be  com- 
bined in  various  forms  appropriate  to  the  business  to  be  served. 

Note.  If  deemed  desirable,  the  instructor  may  secure  a  catalogue  containing  many 
illustrations  of  filing  devices,  and  give  some  attention  to  the  matter  in  his  class. 


APPENDIX  D 


COMMERCIAL   TERMS   DEFINED 


Acceptance.  The  name  of  an  accepted 
draft ;  an  agreement,  by  signature, 
to  the  terms  named  in  the  draft. 

Account  Current.  An  open  or  a  running- 
account;  a  detailed  statement  of 
transactions  between  two  persons 
or  two  firms. 

Account  Sales.  An  itemized  statement 
of  sales  and  expenses,  rendered  by 
a  commission  merchant  to  his  prin- 
cipal. 

Acknowledgment.  A  formal  admission, 
made  before  a  notary  or  other  quali- 
fied officer,  that  the  act  described 
was  done  voluntarily;  the  officer's 
certificate  of  such  admission. 

Affidavit.  A  written  statement  made 
under  oath. 

Agent.  One  who  acts  for,  or  in  place  of, 
another,  by  authority  from  him ;  a 
deputy. 

Assignee.  One  appointed  by  another  to 
do  some  act  or  to  enjoy  some  right ; 
generally,  one  to  whom  property  is 
transferred  for  the  benefit  of  the 
creditors. 

Attachment.  A  seizure  or  taking  into 
custody  by  virtue  of  a  legal  process. 

Auditor.  A  person  appointed  to  examine 
accounts. 

Bankrupt.  Any  person  whose  property 
becomes  liable  to  administration 
under  the  bankruptcy  laws. 

Bill  of  Lading.  A  receipt  of  a  transpor- 
tation company,  containing  an  ac- 
count of  the  goods  shipped  and  the 
conditions  of  shipment. 

Bill  of  Sale.  A  writing  given  by  the  seller 
of  personal  property  to  the  buyer. 


Board  of  Trade.  In  the  United  States, 
a  voluntary  organization  of  business 
men  for  the  advancement  of  com- 
mercial interests. 

Bona  Fide.    In  good  faith. 

Bond.  A  written  promise  under  seal, 
binding  a  person  to  do  a  certain 
thing  or  not  to  do  it. 

Bonus.  Something  given  in  addition  to 
what  is  strictly  due  the  recipient. 

Broker.  An  agent  between  buyer  and 
seller ;  a  dealer  on  the  stock  ex- 
change. 

Capital.  The  investment  in  a  busi- 
ness. 

Cashier.  One  who  has  charge  of  money ; 
in  banks,  the  financial  officer. 

Certified  Check.  A  check  that  has  been 
accepted  by  the  bank  on  which  it  is 
drawn,  thereby  making  the  bank 
security  for  its  payment. 

Clearing  House.  An  institution  in  a  city 
where  daily  settlements  are  made 
between  banks  by  the  mutual  ex- 
change of  checks,  drafts,  etc.,  the 
difference  between  such  exchanges 
being  paid  in  cash. 

Collateral.  A  security  additional  to  the 
personal  obligation. 

Common  Carrier.  One  who  undertakes 
the  office  of  carrying  either  goods 
or  persons  for  hire. 

Copartnership.  The  voluntary  associa- 
tion or  joining  of  two  or  more  per- 
sons in  a  business  enterprise.  The 
same  as  partnership. 

Copyright.  A  right  of  control  granted 
by  a  government  to  an  author  oar 
a  publisher. 


APPENDIX  D 


xvii 


Coupon.  A  certificate  of  interest  due, 
printed  at  the  bottom  of  trans- 
ferable bonds,  designed  to  be  cut 
off  and  presented  for  payment  when 
the  interest  is  due. 

Credit  Memorandum.  A  notice  sent  to 
a  purchaser  stating  that  an  allow- 
ance has  been  made  for  goods  re- 
turned, or  for  other  causes. 

Deed.  A  contract  under  seal,  usually 
transferring  the  title  of  real  estate. 

Depreciation.    A  falling  of  value. 

Dishonor.  A  refusal  to  pay  an  obliga- 
tion when  due,  or  to  accept  a  draft 
when  presented  for  acceptance. 

Dividend.  The  allotment  to  each  stock- 
holder in  the  division  of  profits. 

Drayage.  Charges  for  conveying  goods 
from  one  place  to  another. 

Exchange.  The  method  by  which  debts 
are  discharged  without  the  actual 
transference  of  money;  the  rate  at 
which  such  exchange  can  be  made. 

Extension.  An  allowance  of  further 
time  for  the  payment  of  a  debt. 

Fixtures.  That  part  of  the  furnishings 
of  a  store  or  an  office  which  is  not 
movable. 

Footing.  The  adding  of  a  column  of  fig- 
ures, or  the  result  of  such  addition. 

Forgery.  The  writing  of  another's 
name,  as  a  signature,  with  fraudu- 
lent intent,  or  the  altering  of  a 
written  document. 

Franchise.  A  certain  right  or  privilege, 
granted  by  a  government  to  indi- 
viduals or  corporations. 

Freight.  Compensation  paid  for  the 
transport  of  goods  or  other  property ; 
that  with  which  anything  is  laden 
for  transportation. 

Good  Will.  The  value,  in  a  business,  of 
established  reputation  or  patronage. 

Guaranty.  An  agreement  by  which  one 
person  promises  to  make  another 
secure  in  the  possession  or  enjoy- 
ment of  something;  a  security 
against  loss. 


Honor.  To  accept  a  draft,  or  to  pay  it 
when  due. 

Income.  The  total  amount  of  the  earn- 
ings and  the  receipts  of  money  from 
all  sources. 

Index.   An  alphabetical  table  of  contents. 

Indorse.  To  write  one's  name  on  the 
back  of  a  note,  a  check,  or  a  draft ;  to 
record  a  partial  payment  on  the  back 
of  a  note. 

Installment.  A  sum  of  money  paid  in 
stated  portions. 

Insurance.  Indemnity  against  loss ;  the 
premium  paid  for  insuring. 

Jobber.  A  merchant  who  buys  goods 
from  importers  and  manufacturers, 
and  sells  to  either  wholesale  or  retail 
merchants. 

Liquidation.  Act  or  process  of  settling 
debts. 

Lease.  A  contract,  usually  in  writing, 
for  the  temporary  possession  of  real 
estate  or  other  property. 

Letter  of  Credit.  A  letter  usually  issued 
by  a  bank,  addressed  to  banks  in 
foreign  cities,  directing  payment  of 
a  stated  amount  to  the  holder. 
Such  letters  are  usually  carried  by 
travelers. 

Manifest.    An  invoice  of  a  ship's  cargo. 

Mercantile  Agency.  An  institution  which 
obtains  and  furnishes  information 
regarding  mercantile  enterprises, 
their  financial  standing,  their  busi- 
ness reputation,  etc. 

Money.  Current  coin;  any  circulating 
medium. 

Mortgage.  A  conditional  transfer  of  the 
title  to  real  estate  or  chattels  as  se- 
curity for  the  payment  of  a  debt. 

Negotiate.  To  treat  with  another  with 
a  view  to  reaching  an  agreement ; 
to  transfer  for  a  valuable  considera- 
tion. 

Net.    Clear  of  all  charges  or  deductions. 

Notary.  A  public  officer  who  takes  ac- 
knowledgments of  legal  documents 
and  protests  paper  for  nonpayment. 


XVlll 


BOOKKEEPING 


Open  Account.  A  running  or  an  unsettled 
account. 

Open  Policy.  An  insurance  policy  cover- 
ing undefined  risks  and  admitting 
of  subsequent  indorsements  or  ad- 
ditions. 

Outstanding  Accounts.  Book  accounts 
remaining  unpaid. 

Overdrawn.  A  term  applied  to  a  bank 
account  when  a  check  has  been 
issued  for  an  amount  greater  than 
one's  credit  balance. 

Patent.  An  exclusive  right  to  an  inven- 
tion, issued  by  a  government. 

Pawnbroker.  One  who  makes  a  business 
of  lending  money  on  personal  prop- 
erty pledged  and  in  his  keeping. 

Power  of  Attorney.  A  legal  authority  to 
act  for  another. 

Premium.  The  consideration  paid  for  a 
contract  of  insurance ;  a  sum  or 
bonus  in  addition  to  the  capital. 

Protest.  A  formal  notice,  issued  by  a 
notary  to  the  indorser  or  the  in- 
dorsers  of  a  note  or  draft,  of  the 
nonpayment  of  a  note  or  a  draft,  or 
the  nonacceptance  of  a  draft. 

Quotations.  The  published  or  current 
prices  of  stocks,  bonds,  or  any  com- 
modity. 

Rebate.  An  allowance  for  overcharge,  for 
early  payment,  or  for  other  reasons. 

Receiver.  A  person  appointed  by  the 
court  to  hold  in  trust  property  which 


is  the  subject  of  litigation,  pending 
the  suit ;  or  one  who  is  appointed 
to  wind  up  the  affairs  of  a  partner- 
ship or  a  corporation  on  its  dissolu- 
tion. 

Retail.    To  sell  in  small  quantities. 

Short-extend.  To  enter  individual 
amounts  at  the  left  of  the  money 
column,  to  be  extended  in  total  in 
the  money  column. 

Sinking  Fund.  A  fund  set  apart  for  the 
redemption  of  bonds  or  for  other 
specific  uses. 

Sundries.  Many  different  or  small  things. 

Syndicate.  A  combination  of  capitalists 
who  unite  their  resources  to  advance 
some  specific  business  enterprise. 

Tariff.    A  lawful  rate  of  duty  on  imports. 

Terms.  Conditions  of  sale  or  of  agree- 
ment. 

Tickler.  A  book  containing  memoranda 
of  all  time  paper,  and  arranged  so 
as  to  serve  for  a  reminder  to  pay  or 
to  collect. 

Trustee.  One  intrusted  with  property  for 
another. 

Underwriter.    One  who  insures. 

Valid.    Binding  in  law. 

Void.    Not  binding  in  law. 

Way  Bill.  A  document  containing  a  de- 
scription and  shipping  directions  of 
goods  sent  by  railroad. 

Wholesale.  Selling  large  quantities,  usu- 
ally in  unbroken  packages. 


APPENDIX  E 


ABBREVIATIONS  AND  GENERAL  TERMS 


A America;  American 

A  I First  class 

Acct.  or  acct.  .     .  Account 

Acct.  Cur.       .     .  Account  Current 

Acct.  Sales     .     .  Account  of  Sales 

Adv.  or  adv.  .     .  Advertisement 

Agt Agent 

A.M Before  noon  ;  Master 

of  Arts 

Amt Amount 

App Appendix 

Asst Assistant 

Atty Attorney 

Av.  or  Ave.    .     •  Avenue 

Bal Balance 

B.B Bill  Book 

bbl Barrel 

bdl Bundle 

Bk Bank 

B/L Bill  of  Lading 

Bld*g     ....  Building 

bu Bushel 

bx Box 

^  .     ,     .     .     .     .  Cent 

Cash Cashier 

Ck Check 

Co Company;  County 

C.O.D Collect  on  Delivery 

Coll Collection;  Collector 

Cr Credit;  Creditor 

cwt Hundredweight 

da Day 

Dep't     ....  Department 

Dis Discount 

do The  same 

doz Dozen 

Dr Debtor;  Doctor 

E.  &  O.E.      .     .  Errors  and  omissions 

excepted 


ea Each 

e.g For  example 

Esq Esquire 

etc.  or  &c.      .     .  And  so  forth 

Ex Example 

Exch Exchange 

fig Figure,  Figures 

F.O.B.  or  f  .o.b.    .  Free  on  board 

Fol Folio,  or  page 

ft Foot 

gal Gallon 

gr Grain 

gro Gross 

hhd Hogshead 

hund Hundred 

i.e That  is 

in Inch 

Ins Insurance 

inst Instant ;   the  present 

month 

Int Interest 

Inv Invoice 

Jr Junior 

kg Keg 

lb Pound 

L.B Letter  Book 

L.F Ledger  Folio 

Ltd Limited 

M Thousand 

Mdse Merchandise 

Mem Memorandum 

Messrs.      .     .     .  Gentlemen;  Sirs 

Mfg Manufacturing 

min Minute 

Mme Madam 

mo Month 

Mr Mister 

Mrs Mistress 

MS Manuscript 


XX 


BOOKKEEPING 


MSS Manuscripts 

N.A North  America 

N.B Take  notice 

No.  or  no.       .     .  Number 

O.K All  correct 

Oz.  or  oz.        .     .  Ounce 

P Page 

Payt.  or  payt.     .  Payment 

pc Piece 

Pd Paid 

per By 

Per  cent  or  per 

cent   ....  By  the  hundredths 

pk Peck 

pkg Package 

P.M Postmaster;  After- 
noon 

P.O Post  Office 

pp Pages 

pr Pair 

Pres President 

prox Proximo;  of  the  next 

month 

pt Pint 

P.S Postscript 

qr Quire;  Quarter 

qt Quart 

Rec'd    ....  Received 

Ret'd    ....  Returned 

Rev Reverend 

R.R Railroad 

Ry Railway 

Sec Secretary 

Shipt Shipment 

sq.  ft Square  feet 

Sr Senior 


St Street;  Saint 

Str Steamer 

Sunds Sundries 

Supt Superintendent 

Tr Transpose 

Treas Treasurer 

Ult Ultimo;    of  the  last 

month 

U.S.M.       .     .     .  United  States  Mail 

via By  way  of 

viz Namely;  to  wit 

vol Volume 

vs Against 

W/B     ....  WayBiU 

wk Week 

wt Weight 

Yd.  or  yd.       .     .  Yard 

Yr.  or  yr.       .     .  Year 

Arbitrary  Signs 

a/c Account 

@ At  or  to 

c/o Care  of 

i Cent 

\j Check  mark 

% Dollar 

jjt Number,  if  written 

before  a  figure ; 
pounds,  if  written 
after  a  figure 

% Per  cent 

I^ One  and  one  fourth 

I^ One  and  two  fourths 

I^ One  and  three  fourths 

\ Feet 

M Inches 


APPENDIX  F 

FORMS  AND  LEGAL  DOCUMENTS 
Form  I.   Letter  of  Remittance 


VV.  O.  Weaver  C.  W.  Frey  W.  D.  Radcliffe 

Office  of 

W.  O.  Weaver  &  Co. 

WHOLESALE  GROCERS 


Boston,  ^ass,,    ^S^^..^/(7,  19 — 


xsd 


XXll 


BOOKKEEPING 
Form  II.   Notice  of  Dissolution  of  Partnership 


a^vati/yu^  {^&'{yw~&&rL  (Xup£aZ  X.  cfryvCtA  ayyui  ^JvmZ&x^  €..  fa'yi&Q^;  vauLea, 
tA&  QXA^t&  oj^  of^n^iXA  V^  ^an&Q,,  at  of^iAAmxiii&tcL,  TyioMyQx^i&A'UA^eXta',  lo^ 
tAvO'  cLoA^  cOia^yatv-&cC  {yu  yyiutAAA^^t  ^o-noydA^t ;  tkat  tk&  {>'%iQAyn  &q^  vyi 
the^  yiLtuAy&  w-ilZ  6^  (SxyyvdAMt&ci  {yu  thy&  qxjuIxL  (^A^&aZ&v  H.  fcyyv&a^,  wAo- 
w-ilL  jiUMf'  OAui  cLvQy&AaAxi&  alt  cL&6X^  am^cL  Cia/>-vtttC&Qy^  ayyicL  v&e^&uu-& 
a£t  yyuyyieA^  ^^uiA^a/yte^  to-  tA&  oxuxi  laZ&  lOimv. 


[Siflrned] 


Form  III.   Circular  announcing  the  Retirement  of  a  Partner 


W.  D.  Martin 


Offict  of 

Martin  &  Ward 


A.  S.  Ward 


Soston,  Mass.,  Ciuc^.  ^^,  19— 


din  tk&  3/qZ  vnoZ.  tk& 


n&iAAlyJn  kiXA&ito  e^loZiyyic^  ^<5— 


tw'&e.'yi  lA}-.  cb-.  TyioAjjyyi  oi^^cL  CL.  of.  WdvcL  w-itt  {y&  cL'iQ^ata>-&cL  (m^ 
"vyuiiXAUAL  ^^(yyvQ.&nt.  CLit&v  tkaZ  (£aZ&  tk&  6-icQyt/yv&QyQy  WA.tc  6-&  n^an- 
ciu^t&ci  (yu  TVlv.  IX^Oyui  (yvL  ki^  aw-n  a^^/yumZ  oavcL  in  kto^  aiAyyi  na'my&. 
cJfv  Qyati^itAyyva  cl  (S/>riLiymix^/yL&&  of  ifO^UAy  v-Oytu&d  '^aAAxyyia,a&  i\}-& 
ciQyQA4.v&  uo^  tJvoZ  no-  'b&cUA^uyvv  ^v-Ltt  {>■&  'm(XcL&  Ln  tk&  ^x^js^iZat  ay 
tk&  (yu/^uyi&QyQy ,  am^ci  tAc\L  cult  iZ^  oA-iaLvO'  wttt  6-&  (?.oncUoeZ&cC  w-vCk 
OQ^  av&at  &piiy^&nM^  a^  tkaZ  w-kteA  uotv  kcLV-^y  e/pc/^&w&nS'&cl  wyicL&v 
tk&  ^&Q^emZ  'vyvam^cu^&'nv&nt. 


APPENDIX  F 


XXUl 


Form  IV.   Contract  of  Sale  and  Purchase 


iSinoto  all  0itn  hv  tljese  presents 

that  n^&,  ^.  1/0^.  lA^cnXAvyujLcyyi  If  (Px>-.,  o^  fSo^Xxyyi,  iTlao^xMA'WQ.eXZay, 
in  consideration  of  S^lj^&em'  3^k(yiiaxxrul  3w-o-  /iftitulv&d  Dollars 
paid  hy  cb.  €..  lyO^vtlu^yfvO'  V^  ^a.,  a^  oxMyci  JSo^tan,  the  receipt 
iviiereof  is  hereby  achnowledged,  do  hereby  sell,  transfer,  and 
deliver  unto  the  said  ^.    H.    WHtCcuyn^  V^  ^.,  tA&  (fao-cL  w-itC, 

tac^eZkeA^  waXA  alt  otkeA^  cvoyo^eto^  oj^  tk&  ox^icL  jCvnt  a^  (^.  W".  W^aitk- 
\yyiat(y}'u  If  €.0.,  vyiA't'wcLuyia  a^tt  tAa^&  o/^&eA^i'i&cC  vvu  tA&  Qy(S^h&cLti't& 
k&v&Co  a/nm^&oc&cC  a^ruL  yyuAAJo&d^  *d.  CLyvcL  aoy  a.  '^a.vC  o-^  tA&  '^yuA^- 
eAa^&-'^vi^&  tk&v&o^,  tk&  o^^uCcC  3.  €.  li^Lttiamm'  If  <^.  heA^e/pu 
(M^Ai^yyv&  oAici  cup^&  to-  ^^um^,  amx£  to-  kotcC  tA&  ttn^yyv  ot  ^.  lA)-. 
lAkyiXAiyyuj^xyyi  If  ^.  kwunbteA^  tA&v&iuyyfL,  tk&  l^aAvtCtCe^  ot 
awicL  tiA/yyL  Q/^&&vit&cC  1/)^  tA&  Q.€A&cOwt&  keA^eAdrnto  amm^£/?o&cl  aruL 
yyuAAJoe^cl  B. 

Co  batoc  anU  to  ()oHl,  all  and  singular  the  said  goods  and  chat- 
tels to  the  said  ^.  €,.  WULioAn^  V^  (^.,  and  tk&vv  executors,  ad- 
ministrators, and  assigns  forever.  And  w-&  hereby  covenant  with 
the  said  vendee  that  w&  ci\.&  the  lawful  owners  of  the  said  goods 
and  chattels,  that  they  are  free  from  all  incumbrances,  that  u^& 
have  good  right  to  sell  the  same  as  aforesaid,  and  that  w-&  will 
Warrant  anli  liefenir  the  same  against  the  lawful  claiins  and  de- 
mands of  all  persons. 

3rn  tDttne0fi(  ta)()ereof,  ^i^&  koAye,  hereunto  set  oaca^  hando.  and  sealo, 
this  tw-e/ntAf-'I'iA/QZ  day  of  (Z^i^^oQt  in  the  year  one  thousand  nine 
hundred  and  tw-eZv-e^. 

ISigned^        ^.    ZO-.    l/(^ovtki/yu^to^1.  If  €^.        [seal] 


xxlv  BOOKKEEPING 


Form  V.    Articles  of  Copartnership 


3ittiCltSi  of  COpatttTttSfi^ip  made  and  entered  into  this  first  day  of 
August,  one  thousand  nine  hundred  and  twelve,  between  Malcolm  D.  Gilbert,  of  the 
City  of  Boston,  County  of  Suffolk,  and  Commonwealth  of  Massachusetts,  and  Chas. 
M.  Wentworth,  of  said  Boston :  toitnejsjsetft : 

jFitfiit*  This  copartnership  is  formed  for  the  purpose  of  carrying  on  in  said  City 
of  Boston  a  Jobbing  Furniture  business  under  the  firm  name  of  M.  D.  Gilbert  &  Co., 
and  shall  continue  for  two  years  from  the  date  hereof  unless  sooner  dissolved  by  mutual 
consent. 

^etOtltl*  As  his  contribution  to  the  capital  of  the  firm  said  Malcolm  D.  Gilbert 
hereby  transfers  to  the  said  firm  his  business  now  located  at  No.  467  East  Street,  and 
said  firm  assumes  and  agrees  to  pay  the  outstanding  liabilities  of  the  said  business. 
Said  business  is  taken  over  at  the  net  value  of  ^14,225,  and  is  more  particularly  de- 
scribed in  the  Schedule  of  Assets  and  Liabilities  hereto  annexed. 

QLhittl*  Said  Chas.  M.  Wentworth  contributes  as  his  share  of  the  capital  as 
follows:  cash,  ^7000 ;  stock  of  furniture,  $1500 ;  account  with  Foley  Bros.,  $5735 ; 
total,  $14,225. 

iFottttI).  Bach  partner  shall,  semi-annually,  be  credited  on  the  books  of  the  firm 
with  interest  at  the  rate  of  6  per  cent  per  annum  on  his  share  of  the  capital  for  the  time 
being  standing  to  his  credit,  before  any  division  of  profits  is  made,  such  interest  charge 
to  be  treated  as  an  expense  of  the  business. 

jFiftf)*  Each  partner  shall  be  credited  with  the  sum  of  $100  per  month  as  salary, 
and  he  may  withdraw  the  same  monthly,  for  services  rendered,  or,  at  his  option,  any 
balance  remaining  undrawn  may  be  carried  to  such  partner's  capital  account.  Such 
salaries  shall  be  charged  as  an  expense  of  the  business  and  not  reckoned  as  profits. 

i^iTCt^*  Profits  and  losses  shall  belong  to,  and  be  borne  by,  the  said  partners  in 
equal  shares. 

S^tbtntl)*  Neither  partner  shall,  for  the  benefit  of  any  third  pefrson,  indorse  any 
notes  or  negotiable  paper,  or  become  surety  or  guarantor  or  otherwise  liable  for  the 
benefit  of  third  parties,  without  the  assent  in  writing  of  the  other  partner  first  obtained. 

^iff|)t()»  An  account  of  the  stock  and  of  the  debts  and  liabilities  of  the  firm  shall 
be  taken  at  least  annually,  and  the  profits  or  losses  computed  and  credited  or  charged  to 
each  partner''s  capital  account.  After  such  accounting,  either  party  shall  be  at  liberty 
to  withdraw  his  share  of  any  net  profits  of  the  firm,  and  any  profits  not  so  withdrawn 
shall  be  added  to  and  deemed  a  part  of  the  capital  account  of  such  copartner. 

if^liutl).  Neither  partner  shall  engage  in  any  other  business,  but  each  shall  devote 
his  entire  time  and  attention  to  and  put  forth  his  best  efforts  and  energy  for  the  further- 
ance of  the  business  aforesaid. 

STtTltl)*  Complete  and  accurate  books  of  account  shall  be  kept,  used  in  common, 
and  each  partner  shall,  at  all  times,  have  access  thereto. 

To  the  faithful  performance  of  all  the  terms  and  conditions  of  these  Articles  of 
Copartnership,  the  undersigned  partners  hereby  bind  themselves  each  to  the  other,  his 
heirs,  executors,  administrators,  and  assigns. 

3^n  QlMttneSfiS  ^\Wi)^tVtOf,  the  parties  have  hereto  affixed  their  hands  and  seals, 
in  duplicate,  the  day  and  year  first  above  written. 


[Signed] 


^    ?yioiUx>tm.  3.    ^M-eAt         [SEAL] 
^    0ha^.    ?J1.    W^&nt/iv-cyM.      [seal] 


appe:n^dix  f  xxv 

Form  VI.   Power  of  Attorney 

linotD  all  itten  \)v  t|)ese  presents 

that  i4^&f  ^'  1(^'  Iflcyufcuyu  oa^^cL  Ro^yeAt  Halt,  e^noZvUiti/Kc^  tk& 
ICvm,  oi  IS.  10^.  TJ^tcyufoyyi  V  ^o-.,  of  the  City  of  JSa^n,  THcm^., 
have  made,  constituted,  and  appointed,  and  hy  these  Presents 
do  rnahe,  constitute,  and  appoint,  ^kavt&o^  771.  RoAfvyvcyyicL, 
of  the  City  of  cAeAA^tan,  THcma..,  cyuA.  true  and  law ful  Attorney , 
for  ua-  and  in  (yuAy  naine,  place,  and  stead  to-  tvam^a^t 
(>^i(AAjyi&^A^  ouncL  to-  qamti  amci  vyiclxyi^&  am.u  o^  oLt  oj^  tA&  uote^, 
ike^k^,  ctvO'ltoy,  C&tZeAyQy,  oyKcl  all  otkeAy  irvoXAAiAyvemtoy  ijyi  waaXA'TicJ' 
ve^£AA)-&ci  iyvL  tk&  eAM4A^&  o-i  ov  ta^uAyyia  i\xyyyv  o^w  (M4^\yyi&QA/ ,  ^ivin^ 
and  hereby  granting  unto  o^ov  said  Attorney  full  power  and 
authority  to  qax^tv  oavcL  vyuioAA.&  oAieA  Im^XAAoyyuemZo^,  oa^cL  to- 
4i.eAAo\mv  alt  a'wcL  ev-eAAf  a<sZ  iipkatQX)-aA}-£Ay  ai^-awt  tk&  ^v&yyviAy&Oy 
as  freely,  fully,  and  effectually  as  w-e.  could  do  if  personally 
present,  with  full  power  of  substitution  and  revocation,  hereby 
ratifying  and  confirming  all  that  o^ua,  said  Attorney  or  his 
substitute  shall  lawfully  do  or  cause  to  be  done  by  virtue  hereof. 
5n  ^itttCfiifli  l^bcreof,  w&  have  hereunto  set  o^ia  hands  and 
seals  this  Ult&eAM,  day^  o^  jtXi^  in  the  year  nineteen 
hundred  ayyicL  tuy&tv-e. 

Attorney's  Signature  Ro^£aZ   ffaZt  [seal] 


Commonwealth  of  Massachusetts)  .^  r^    ^         r^^  n    n      .  ^    i r^ .  ^ 

County  of  Suffolk  )  '  '   f      r        ' 

Then  personally  appeared  the  above-named  Id.  K^.  TVlo^ufayyv 
ayyicL  Ro6-eAt  /ifall  and  acknowledged  the  foregoing  instrument 
to  be    tk&iAy   free  act  and  deed. 

Before  me, 

€.  ^.  mau 

Botarp  public 


XXVI 


BOOKKEEPING 
Form  VII.   Certificate  of  Protest 


ContmontDealti)  of  JWassacfjusetts 


County  of  Suffolk 
City  of  Boston 


0. 


On  the  temtk  day  of  ^&&&wA&v,  in  the  year  of  our  Lord  one 
thousand  nine  hundred  am^  Vw-&tv-&,  3*  I'O^-  ^'  lX}ttleA^, 
JBotatp  Pttblt(,  duly  admitted  and  sworn,  and  practicing  in  said 
Commonwealth,  at  the  request  of  L&ic^lv  /if.  JSwvoxyyi,  (JBfiSq., 
Casd^tcr  of  the  (^awL^m^eAy^^iaZ  c/taZuyymL  Ba.'yb'h,  went  with  the 
original  7iot&;  which  is  hereunto  annexed,  the  time  therein 
limited  having  fully  elapsed,  and  demanded  payment  thereof 
oL  tk&  Sx^s^&l^AyOV  cyfatuyyuut  Boyyik^,   amAy  w-oim/  a/yLo^ti^-eAy&ci  iyu  tk& 

The     not&     remaining  unpaid,  I  duly  and  officially  notified 

the  {yyvcLo-VQy&vO'  tAeA^&o^  at  tk&  j^oUxyw-in^  acLcCv&o^e^ : 

B.  W^.  f'foJ.em,  V  €a.,  cAtwlcyyi,  THao^., 

{postage  prepaid)  of  said  .  d&'^cMiit  requiring  payment. 
^berefore,  /,  the  said  iltiotarp,  hy  request  as  aforesaid,  have  pro- 
tested and  hy  these  presents  do  solemnly  protest,  against  the 
drawer  of  said  ^ot&,  the  indorser,  and  all  others  concerned 
therein,  for  exchange,  re-exchange,  and  all  costs,  charges, 
damages,  and  interest,  suffered  and  sustained,  or  to  he 
suffered  and  sustained,  hy  reason  or  in  conse- 
quence of  the  non-payment  thereof. 

^W.  STCfilttinOTip   ^^ZXttsi,  I  have  hereunto  set  my  hand  and 
affixed  my  J^otarial  Seal,  the  day  and  year  first  above  written. 


Noting  Non-Acceptance  .    . 

Postage 

Protesting  for  Non-Payment 
Postage 


f/.60 


Jlilotarp  Pttblic 


APPENDIX  F  ^     XXVU 


Form  VIII.   Notice  of  Protest 


Commercial  Rational  ^ank 

Boston,  Mass.,     ^&&,  /O ,      /^ — 

Bear  Sir  a.: 

Yow  are  hereby  notified  that  a      not& 

for     c4vyi&  /lfi</yvcOi&d  ^vxty  j^ ^^^^-Dollars 

drawn  by  LeM^h&v,  Buvv  V  €0. ,    cu^d  indorsed  by      i^cyw,     dated 

cfe/^.  10,      19 ,  payable     tkv&&  'vyuyyith^     after  date,  has  been 

protested  by  me  for  non-payment  after  due  demand  at  tk& 
€oc^&U/io^  cAatuyyval  fSamJo  this  day,  and  that  you  are  held 
answerable  for  the  amount,  with  all  legal  costs,  interests,  and 
damages  in  consequence  of  the  non-payment  thereof 

Respectfully  yours 


INDEX 


Abbreviations xix 

Of  purchase  ledger  .  .  .  229,  260 
Of  sales  ledger     ....       229,260 

Acceptance,  definition  of      ....     128 

Account,  or  accounts 

Apply  on 10 

Classes  of xi 

Classification  of    .     .     .     .     .     24,  26 

Closing,  by  balance 36 

Controlling 316 

Definition  of 16 

How  to  open 17 

In  full  of 10 

Of  sales 114 

Open 26 

Personal,  definition  of  ...  .  xiii 
Personal,  showing  loss  .  .  .  261 
Suspense 265 

Accounts  payable,  definition  of     .     .     175 

Accounts  receivable 175 

Allowances xi 

Assuming  charge  of  books    ....     259 

Auxiliary  books xii 

Bank 

Definition  of 67 

Opening  account 67,  68 

Bill,  definition  of 42 

Bill  book 

Definition  of xii 

Models  of ii,  140 

Bills  of  lading 

How  drawn 161 

Kinds  of 159 

Uniformity  of 161 

With  draft  attached       ....     171 

Bills  payable,  definition  of  .     .     .      12,  xi 

Bills  receivable,  definition  of    .     .      12,  xi 

Book  of  original  entry xii 

Bookkeeping 

Definition  of xi 

Methods  of xi 

Briefing 

Articles  of  partnership  ...  181 
Power  of  attorney 258 

Business  correspondence,  suggestions 

for 125 

1  Business  statements 

Definitions  of 27,  xii 

Forms  of     ...    4,  40,  177,  244,  328 

Business  transactions,  definition  of    .  7,  xi 

Capital 

Combinations  of 297 

Definitions  of 27,  xi 


PAGE 

Cash 

Definition  of 8 

How  proved 78 

Cashbook 

Description  of 58 

Illustrations  of     .     .      ii,  64,  144,  204, 

250, 314 

Opening  entry  in 101 

Petty 316,  321 

Cash  sales,  how  treated 203 

Charge,  meaning  of xii 

Check 

Certification  of 219 

Definition  of 43 

Significance  of  certification    .     .     219 
Check  book 

How  kept 72 

Model  of 71 

Stubs  of,  compared  with  canceled 

checks 178 

C.O.D 161,  170,  171 

Collection  and  exchange,  when 

charged 167 

Commercial  agencies 284 

Commercial  terms  defined    ....     xvi 

Commission 115 

Commission  merchant 114 

Condition  of  business 27 

Consignee 114 

Consignment 114 

Consignor 114 

Contract  of  sale xxiii 

Corporations 

Books  of 299-301 

Capital  stock  of 298 

Compared  with  partnership  and 
joint-stock  companies     .     .     .     297 

Definition  of 297 

Fees  of 298 

Officers  and  management  .     .     .     298 
Opening  entries  for  .     .     .       301,  307 

,         Organization  of 297 

Powers  of 298 

Reports 299 

Stockholders'  liability  ....     299 

Credit 11,  15 

Creditor 11 

Daily  cash  proof 78 

Debit 11,  15 

Debtor 11 

Deposit  tickets -.  68-70,  167 

Depositor,  identification  of  ...     .       67 

Deposits,  how  recorded 72 

Depreciation 293 


1  In  the  text  these  forms  are  also  the  loss  and  gain  statements, 
xxix 


XXX 


BOOKKEEPING 


Discount  ^A«^ 

Bank . 96 

Definition  of xi 

Term  of 97 

Dividend,  definition  of 299 

Double  entry 

Changed  to  single  entry     ...       ix 
Compared  to  single  entry  ... 
Contrasted  with  single  entry  .     . 

Definition  of x 

Opening  entries  for 136 

Principle  of 27 

Drafts 

Analysis  of 116 

Bank,  definition  of 123 

Commercial,  definition  of  .     .     .     116 

Kinds  of 117,  123,  128 

Manner  of  accepting     .     .     .     .     129 

Object  of 116 

Parties  to 116 

Questions  on 134, 136 

Relation  of  parties 117 

Rules  for  journalizing   .     .     .  120, 132 
With  bill  of  lading  attached  .     .     171 
Entry 

Compound 46,  98 

Simple 98 

Erasures,  avoidance  of 6 

Errors,  correction  of 38 

Exchange 123 

"Expense 

Definition  of 8,  xi 

How  closed 32 

Illustrations  of 8,  9 

Incidental,  classification  and  clos- 
ing of       332,  333 

Inventory  of 29 

Loss  on,  how  found 29 

When  credited 29 

1  Financial  statements   • 

Definition  of 27 

Forms  of 4,  40,  245 

Franchise,  definition  of 299 

Gains,  how  realized 27 

Goodwill 215 

Incoming  business  forms      .       82,  91,  100, 
107,  151,  182,  209,  232,  251,  276 

Index  for  ledgers 175 

Indorsements,  definitions  and  illustra- 
tions of 89,  90 

Insolvency 27,  xi 

Insurance  policy 156 

Interest 

Debit  and  credit  of 46 

Definition  of xi 

How  adjusted  between  partners  .     242 

How  closed 54 

How  computed 96 

Loss  or  gain  on 47 

Rate  of 96 

Interest  and  discount  entries    ...       97 
Inventory 

Definition  of xi 

Expense,  how  found      ....       29 


Inventory  *AaB 

Explanation  of 24,  25 

Liability 180 

Merchandise,  how  found    ...       24 

Investment 14 

Invoice 

Checking  of 83 

Definition  of 42,  xii 

Invoice  book 

Explanation  of 143 

Models  of 142,  206 

Invoice  register 

Explanation  of 316 

Illustration  of 314 

Joint-stock  company,  definition  of     .     297 

Journal 

Analysis  of 15 

Definition  of xii 

Forms  of 2,  208,  ii 

Journalizing 

Definition  of 11 

Rules  for 16,  xii 

Ledger 

Analysis  of 18 

Auxiliary,  advantages  of    .     .     .     207 

Definition  of 16,  xii 

General 207 

How  closed 30 

Purchase 207 

Sales 207 

Letters 

Announcing  retirement  of  partner  xxii 
Containing  inclosure      ....     158 

Dunning 288 

Of  application 210 

Of  recommendation 241 

Of  remittance 221,  xxi 

Ordering  goods     ....       126,  157 

Soliciting  trade 285 

Suggestions  on 280 

Liabilities,  definition  of   ...     .      26,  27 

Loose-leaf  methods xiv 

Loss  and  Gain  account,  how  closed    .      32 

Losses,  how  sustained 27 

Merchandise 

Analysis  of 334 

Classification  of  ...  .  274,  331 
Classified  accounts  closed  .      292,  331, 

332 

Definition  of 8,  xi 

Gain  on,  how  found  .  .  .25,  291 
How  closed 30 

Merchandise  discount      .     .     .       109,  166 

Monthly  statement 

Of  depositor's  account  ....  72 
Of  open  ledger  account      ...      xii 

Net  gain 27 

Net  loss 27 

Notes 

Charging  to  depositor's  account  .  169 
How  discounted,  with  interest  .  266 
How  discounted,  without  interest  168 
Maturity  of,  how  found  ...  97 
Model  explained 77 


1  In  the  text  these  forms  are  also  the  resource  and  liability  statements. 


INDEX 


XXXI 


PAGE 

Opening-entries 

Exercises  in     .     45,  136,  197,  301,  307 
Models  of 61,  137 

Overdrafts,  how  treated 293 

Partner's  private  accounts  ....     218 

Partnership,  or  copartnership 

Articles  of xxiv 

Definition  of 297 

Dissolution  of 195 

How  formed  ;  illustrative  entries  .     198 

In  Set  IV,  May 99 

In  Set  V,  August 181 

Notice  of  dissolution      ....    xxii 

Pass  book,  how  kept 72 

Payroll 320 

Personal  account 

Definition  of xiii 

When  a  liability 27 

When  a  resource 27 

Posting 

Definition  of 16,  xi 

Directions  for 16,17 

Double 326 

Power  of  attorney 

Definition  of 253 

Form  of xxv 

Present  worth 27,  xi 

Price  lists      .   41,  51,  80,  98,  101,  146,  202, 

252,  313 

Principles,  summary  of    .     .     .     .      15,  16 

.Property xii 

Protest 

Certificate  of xxvi 

Method  of 269 

Notice  of,  explained       ....     256 

Notice  of,  form xxvii 

Value  of 269 

When  necessary 269 

Purchase  book 

Description  of 58 

Forms  of 63,  77 

_JB^al  estate,  definition  of      ....       57 

Receipt 

Definition  of xi 

Forms  of .     .  9,  74 

Rechecking 19 

Red  ink,  uses  of 36,  xii 

Resources,  definition  of   .     .     .     .     26,  27 

Results,  definition  of 27 

Review  exercises    .     .      28,  45,  54,  89,  95, 
106,  112,  179,  197,  230,  246,  275,  295,  ix 

Review  questions,   .     .     .50, 122, 134. 136, 

196,  293 

Ruling,  exercises  in 13,  30 

Sales  book 

Description  of 58 

Form  of 64 

Script  illustrations 

Bank  draft 123 

Bank  statement,  depositor's  ac- 
count  73 

Bill  book ii,  lii 

Bill  of  lading 160 

Cash  account  closed  by  balance  .       36 
Cash  proof 78 


PAGE 

Script  illustrations 

Cashbook 64,  65 

Cashbook,  opening  entry  in  .  .  101 
Check  book  and  stubs    .     .     .71,  163 

Checks 43,  53,  123 

C.O.D 170,  171,  172 

Deposit  ticket 70 

Discount  memorandum  .  .  .  168 
Drafts  .  117,  119,  121,  128,  130,  131 
Drafts,  entries  for  .  .  118,  120,  121, 
124,  125,  129,  130,  131,  132 
Indorsements  ...  87,  90,  119,  124 
Interest  account  closed  ...  54 
Inventories,  model  for  recording        6 

Invoice  book 142,  206 

Invoices       .     .    42,  44,  75,  76,  83,  253 

Journal 2,  38,  51,  63 

Ledger    .     .     .    3,  5,  24,  31,  36,  39,  66 

Letter 126,  xxi 

Loss  and  Gain  account  ....     106 

Notes 12,  43,  52,  77,  86 

Purchase  book 63,  77 

Receipts 9,  74 

Rechecking 19 

Reverse  check  stub 70 

Ruling  an  account 30 

Sales  book 64,  65 

Signature  card 68 

Statement  of  account,  model  .     .     178 

Statements 4,  40 

Stock  certificate 302 

Stock  transfer  book 300 

Trial  balances 4,  65 

Voucher  book 311 

Voucher  check  .  .  .  .'  .  .  312 
Voucher  and  check  combined      .     310 

Shipper's  order 161 

Signature  card,  use  of 68 

Single  entry 

Changing  to  double  entry  .  .  .  viii 
Compared  to  double  entry  .  .  i 
Contrasted  with  double  entry      .         i 

Definition  of xi 

Solvency xi 

Statement  proof,  illustrations  of    .      4,  177 

Statements,  forms  of 39 

Stock,  certificate  of 299 

Stock,  classes  of 

Common 298 

Preferred 298 

Treasury 299 

Watered 299 

Telegram 

How  to  write 165 

Illustration  of 164 

Terms  on  invoices 159 

Trade  discount 163 

Trial  balance 

Definition  of 18,  27 

Forms  of 4,  65 

Of  balances 79 

To  find  errors  in 79 

Value 7 

Voucher xi 

Voucher  system  of  bookkeeping    .     .     309 


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